One of the reasons behind the demand decline in the shipping market is the financial challenges people are facing due to rising inflation and price hikes. Analysts claim there is a shift in consumption trends, and consumers are either turning to low-cost retailers or spending more on services than goods.

China, in particular, is placing significant attention on the situation. The lifting of the zero-COVID policy was a step towards reviving the economy after it witnessed multiple bottlenecks due to infection prevention measures. Now officials have highlighted that stimulating consumption has become one of the country’s top priorities for economic development in 2023.

Earlier this year, Chinese banks, such as the Bank of China and China Construction Bank, announced offering preferential interest rates and retail loans for their customers. According to an article by Bloomberg, the promotions coincided with the Lunar New Year, “seeking to capture consumer demand during the nation’s most important annual holiday.”

This initiative seems to have had a positive impact on consumer spending during the first two months of the year. China’s state-owned news agency Xinhua wrote earlier in February, “The diminished impact of COVID-19 on economic activities, strong consumption during the Spring Festival holiday and the rapid rebound in consumer demand are conducive to the growth of household loans, which rose 257.2 billion yuan (USD 37.4 billion) last month.”

A report by the Financial Times confirms the growth announced by China as it revealed that retail sales rose 3.5 per cent year on year in the first two months of 2023. Chinese officials have set a detailed strategy to boost investment and economic recovery, and they are aiming to achieve a growth target of up to 6%.