China Shops, Amidst Falling Stocks

Tourists tour a commercial street during the National Day Holiday last week in Chengdu, Sichuan Province. (Photo by China Photos/Getty Images)

While purse strings around the world have been tied tight as a result of the economic crisis, consumerism in China has increased in recent weeks, due mainly to the week-long National Day holiday.

Consumer spending is up, so says the Ministry of Commerce in a China Daily article today. The Ministry said spending during the National Day Holiday week grew 21 percent over last year to 420 billion yuan, or $61 billion.

But stock markets in China also took a major hit today, in the first day of trading after a week off for the holiday. The Shanghai Composite dropped 5.2% to 2,173.74, and the Shenzhen All Share index slid 3.8% to 590.91, reports China Daily and MarketWatch.

Chinese are worried that the financial crisis may curb China's growth rate, now averaging 9.6 percent, the newspaper reported. The global financial services firm, UBS, also lowered its forecast for China's growth in 2009 to 8 to 8.8 percent. More than a third of China's gross domestic product comes from exports.

Even the Chinese Premier Wen Jiabao has expressed concern. In his landmark one-on-one interview with CNN's Fareed Zakaria last week, the Premier said that a U.S. recession would certainly impact the Chinese economy.

"As we know that 10 years ago, the China-U.S. trade volume stood at only $102.6 billion U.S., while today the figures soar to $302 billion U.S.," Wen said.

"A shrinking of U.S. demand will certainly have an impact on China's export. And the U.S. finance is closely connected with the Chinese finance. If anything goes wrong in the U.S. financial sector, we are anxious about the safety and security of Chinese capital."