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China's consumers keep their wallets in lockdown as Covid-19 curbs ease

A staff member wipes a seat at a restaurant, following a ban on dine-in services amid the Covid-19 outbreak, in the Central Business District of Beijing, China on June 2, 2022.

A staff member wipes a seat at a restaurant, following a ban on dine-in services amid the Covid-19 outbreak, in the Central Business District of Beijing, China on June 2, 2022.

BEIJING — China's sputtering economy has a lot riding on its consumers, who are just now emerging from lockdowns in Shanghai and other big cities. But those hopes are running up against the likes of Mr Wu Lei, a soccer coach in Beijing who has put off buying a new mobile phone.

"I've lost the lion's share of my income since Beijing called a stop to after-school sports clubs in April," said Mr Wu, a 37-year-old with two daughters. The five-week-long near-shutdown of the Chinese capital under China's stringent Covid-19 measures was eased on Monday.

China is moving to spur spending that was depressed by Covid-19 curbs in some of its biggest cities, but piecemeal measures such as vouchers, subsidies for car buyers and digital yuan payments have been modest compared with other big global economies.

Policymakers have instead stuck to their preferred approach to stimulus, which focuses on businesses and infrastructure.

Those measures, analysts said, will not be enough to drive a recovery in consumer spending, which accounted for more than two-thirds of first-quarter growth in China's economy, as it rebalances away from a heavy dependence on exports and investments.

That will, in turn, impede the strength of recovery in the world's second-largest economy, a crucial engine of global growth.
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