Skip to content
Subscriber Only

China’s Poor Getting Poorer as Virus Hits Consumption: CICC

A health worker carrying out a Covid-19 coronavirus test in Dalian, in China's northeast Liaoning province. 

A health worker carrying out a Covid-19 coronavirus test in Dalian, in China's northeast Liaoning province. 

Photographer: AFP via Getty Images

China’s economic recovery will continue to be held back by weak consumption, as the lower-income part of the population are still seeing falling wages and persistent virus outbreaks keep consumers at home, according to China International Capital Corp.

The Covid-19 crisis has had a bigger impact on people at the lower end of the country’s income ladder, including migrant workers and those working in the sectors hit the hardest by the outbreak, such as catering and retail sales, CICC economists led by Liu Liu wrote in a note. Migrant workers’ monthly wages contracted by 6.7% in the second quarter, even though disposable income growth nationwide recovered to 4.5% in the period, according to Bloomberg calculations using official data.