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China has set its lowest economic growth target since the 1990s, aiming for roughly 4.5 to 5% this year. That's according to the country's premier at the annual political gathering in Beijing yesterday. This is a more modest goal for an economy once defined by double-digit expansion, and it reflects sluggish domestic demand. NPR's China correspondent Jennifer Pak reports from Shanghai.
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JENNIFER PAK, BYLINE: Bailian ZX Creative Center is like the paradise of the anime scene in Shanghai. There are six floors of shops selling badges, posters and figurines of anime, comics and gaming characters.
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PAK: There's a steady flow of people, including a young woman dressed as a Japanese anime character. Summer Xie has a stylish blond wig and a black robe. This stuff can get expensive, she says, pointing at her costume.
SUMMER XIE: (Non-English language spoken).
PAK: "In a month, I spend anywhere from 4- to $700 on dressing up," she tells me.
By some estimates, this industry in China will be worth over $30 billion this year. That sounds like a lot, but it doesn't make up for the drop triggered by the ongoing slump in the property sector, which at its peak accounted for a quarter of the Chinese economy. And when the housing market was booming, says Eurasia Group economist Wang Dan...
WANG DAN: Majority of the family were thinking about investing in new housing or upgrading their old housing, and once they upgrade their old housing, they would buy new cars, new air con, new fridge, and interior decoration could cost easily half a million Chinese yuan.
PAK: That works out to $72,000. And now property prices are dropping, she says. That part of the spending is gone.
WANG: China's consumer market now is in a very depressed state.
PAK: The Chinese government has tried to encourage consumption, but the boost was temporary. Property prices keep dropping. Homeowners like Hong Linyan, who has multiple properties in Jiangsu Province, don't feel as rich as before.
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PAK: We meet her at the Shanghai anime mall, where she is sitting on the floor waiting for her daughter to finish shopping. She's now saving 40% of her salary for emergencies.
HONG LINYAN: (Non-English language spoken).
PAK: "Now that my parents are getting older," she says, "they might have health issues, or my child might have unexpected expenses."
UNIDENTIFIED PERSON: (Non-English language spoken).
PAK: So if Chinese consumers are saving a lot again rather than spending, manufacturers are going abroad to find new markets, and that's angering the U.S., Europe and other countries, says economist Wang Dan.
WANG: They want China to actually export less and import more, encourage local consumption, increase local wages so they can sell more to China.
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PAK: Helping companies to raise wages is one way for Beijing to boost consumption like apartments, but it's not enough to motivate 32-year-old Gu Yu, who's only interested in spending on anime and food.
GU YU: (Non-English language spoken).
PAK: "I have very little desire for high-end stuff these days," she tells me. "Some people might buy luxury bags or branded cosmetics and perfume," she says. "For me, those things are optional, maybe less important than a cup of milk tea." And she says she's still living with her parents because she's not able to save up for a home.
Jennifer Pak, NPR News, Shanghai.
(SOUNDBITE OF NXWORRIES AND H.E.R. SONG, "WHERE I GO (FEAT H.E.R.)") Transcript provided by NPR, Copyright NPR.
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