From Cars to Jewelry, China’s Shoppers Are Spending Again

Big crowds at places like the Beijing auto show are a sign of good news for a world mired in recession. But China needs its less affluent to spend more before its growth engine can return to full speed.


By Keith Bradsher

BEIJING — Right before executives and car enthusiasts could gather in Geneva for the big auto show there in early March, the organizers called it off. As the coronavirus spread, other shows followed suit: Detroit, Los Angeles, New York, Paris and São Paulo.

So after a long lull, the first major auto show since the pandemic hit opened this weekend in Beijing, giving automakers a chance to showcase new models and big ideas for the future. Under the pulsating lights, executives and car fans admired new rides from big Western companies like Ford and Volkswagen, and from Chinese rivals. The gleaming sport utility vehicles, sedans and other cars were aimed at China’s consumers, who have emerged from Covid-19 lockdowns with a yearning to spend.

The automakers are chasing people like Ben Cao. Mr. Cao, a 33-year-old Shanghai consultant, and his wife bought a dark blue Porsche Panamera sedan in May to replace their Range Rover Sport, then bought a chalk gray Porsche Cayenne in July to replace their Audi TT Roadster. When cinemas reopened this summer with social distancing, they went to see Christopher Nolan’s “Tenet” and “Eight Hundred,” a Chinese war movie.

When he went shopping a few days ago at elite jewelry stores for a new ring for his wife, Mr. Cao found that other customers had already been there.

“For a lot of extremely expensive jewelry, they were out of stock,” he said.

The Chinese economy shrank in the first quarter, its first contraction of the modern era, but now has resumed its surging ways. The nation’s factories are once again churning out goods for the world. Plentiful government lending is fueling big construction projects. Chinese officials are expected to report next month that growth accelerated during the July-to-September quarter, even while the rest of the world limps along.

The recovery in spending started with the affluent after coronavirus lockdowns last spring and has begun spreading to middle-class families, but many low-income workers are still struggling. Retail sales grew 0.5 last month compared with a year earlier, the first increase this year. Xibei, a national chain of mid-priced restaurants that were mostly empty last spring, said that its sales from Sept. 18 through 24 were up 4.5 percent compared with the same days last year.

China’s wealthy are willing to shop. Restaurants, hotels and airports are crowded again. Business hotels in Beijing have nearly doubled room rates by eliminating pandemic discounts and filled up anyway. And while practically all international travel is still suspended, big airports in cities like Guangzhou and Chongqing have almost as many domestic travelers as last year.

Spending by customers like Mr. Cao has lifted sales for luxury carmakers like Porsche, which has even flown electric Porsche Taycans from Germany for sale, and NIO, a Chinese electric car competitor to Tesla. “Life continues without any big impact from the pandemic,” said William Li, NIO’s founder and chief executive.

A big question, when China’s middle class would join in, seems also to have been answered. While sales of large and luxury cars recovered swiftly in April, compact car sales stayed weak through much of the spring and summer despite heavy price discounting by automakers. Now they have almost caught up to last year’s pace. Public concerns about catching the virus on mass transit helped car sales in the spring, but sales have stayed strong in recent weeks even as those concerns faded.

“The cheaper vehicles are coming back,” said Yale Zhang, the managing director of Automotive Foresight, a Shanghai consulting firm.

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