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Emotional Spending Surges in China Amid Rising Costs

3/25/2026

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Summary

Story summary

Chinese consumers are prioritizing emotional spending over practical purchases amid rising living costs.
Analysts say younger consumers, cushioned by familial wealth, have more freedom to buy non-essential items.
Spending on traditional gifts drops during Chinese New Year, while travel and cosmetics rise.
The emotional economy is projected to reach 4.5 trillion yuan by 2029 (about $655 billion).

History

Historical Context

In 2019, China's retail sales growth slowed to 8%, reflecting a shift in consumer behavior, particularly among younger generations who increasingly favor non-essential items. This trend follows decades of economic reforms initiated in the late 1970s, which widened the wealth gap and altered spending patterns, with the emotional economy projected to reach 4.5 trillion yuan by 2029, indicating significant market evolution.

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Story summary

Chinese consumers are prioritizing emotional spending over practical purchases amid rising living costs.
Analysts say younger consumers, cushioned by familial wealth, have more freedom to buy non-essential items.
Spending on traditional gifts drops during Chinese New Year, while travel and cosmetics rise.
The emotional economy is projected to reach 4.5 trillion yuan by 2029 (about $655 billion).

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