Lunar New Year holiday to show Chinese consumers cutting back

China’s consumers have cut back on purchases of everything from Apple Inc.’s iPhones to Swiss watches as the trade war with the U.S. hits the economy, according to Bloomberg. The upcoming Chinese New Year holiday season lasts seven days (Feb. 4–10).

This year’s celebration is the first to take place during a trade war with the United States, as China’s 1.4 billion people prepare to welcome the Year of the Pig

In 2018, Chinese spent 926 billion yuan ($137 billion) at restaurants and stores ringing in the Year of the Dog.

Companies selling to middle-class consumers will be the most vulnerable this holiday as wealthier Chinese continue shopping but the more budget-conscious cut back, said Adam Xu, a partner in Shanghai with consulting firm OC&C, who advises retail and consumer companies on their China strategy. “The slowdown in growth is happening and most likely in the mass part of the market,” Xu said.

And Nikos Kavalis, London-based director of research firm Metals Focus Ltd., said buying “will not be what it used to be 10 years ago because a lot more Chinese consumers nowadays choose to travel abroad rather than go to their hometown.”