From coffee cups to economic cuts: How a ‘conscientious’ economist’s brewed-up insights are stirring online buzz in China

Nevin Al Sukari - Sana'a - The strong reaction to Fu’s views highlights a growing frustration with the lack of transparent discourse about China’s economic challenges. — AFP pic

By Malay Mail

Saturday, 14 Sep 2024 9:57 AM MYT

BEIJING, Sept 14 — An outspoken economist has captured the attention of Chinese social media with his candid analysis of China’s sluggish economy.

According to South China Morning Post, Fu Peng, chief economist at Northeast Securities, garnered widespread attention with his forthright comments delivered at the 2024 Phoenix Financial Forum for the Greater Bay Area in early September.

At the forum, Fu tackled pressing issues, including the stock market downturn and the real estate crisis.

One of his notable comments involved a stark illustration of middle-class consumption downgrades, which he linked to the faltering property market.

“Once property values drop, consumer spending falls rapidly, with middle-class buyers shifting from 40 yuan coffees to 8 yuan ‘buy one, get one free’ deals,” he said at the time.

This vivid analogy, presented during the event organised by ifeng — a news portal affiliated with Hong Kong’s Phoenix TV — has been widely shared and discussed.

Fu's remarks have sparked intense debate as China grapples with the effects of its economic slowdown.

With businesses downsizing, households reducing expenditures, and investors remaining wary, his observations have found a receptive audience.

Fu highlighted that the decade following 2009 saw consumption upgrades in China, largely driven by rising wages or real estate value increases.

However, he cautioned against dependence on the property market, noting its volatile impact on consumer spending.

“The ‘wealth effect’ brought by real estate has faded, exerting a direct impact on consumption,” Fu wrote in a follow-up post on Weibo, where he boasts nearly 3.9 million followers.

Drawing a parallel with Japan’s economic situation from 1990 to 2002, Fu observed similar patterns of consumer reluctance and high deposit levels, attributing these to the fading economic momentum.

His speech, which has garnered over 162,000 views on Bilibili — a popular video-sharing platform — covered additional concerns such as population ageing, weak demand, and low investor confidence.

Fu also discussed the limited relief offered by overseas business expansion and the detrimental effects of cost-cutting measures, like layoffs, on domestic demand.

In a widely circulated Weibo video, Fu's remark about real estate transitioning from an investment to a consumption expense with significant annual maintenance costs drew two million views.

Many online users have praised Fu as a “conscientious economist,” appreciating his thorough and honest analysis.

The viral nature of Fu’s comments underscores a broader sentiment among the public, particularly as China’s economic growth decelerated to 4.7 per cent year-on-year in the second quarter, down from 5.3 per cent in the first quarter.

While Beijing has set a growth target of “around 5 per cent” for the year, President Xi Jinping has recently tempered expectations, focusing on broader economic and social development goals.

The strong reaction to Fu’s views highlights a growing frustration with the lack of transparent discourse about China’s economic challenges.