CNBC's The China Connection newsletter: China's weak consumer becomes the world's problem

A China-Africa liner carrying 23800 tons of mechanical equipment and engineering vehicles set sail from Yantai Port to Ghana, Yantai City, Shandong Province, China on September 3, 2026.Cfoto | Future Publishing | Getty ImagesHi, this is Evelyn, writing to you from Singapore. Welcome to the latest edition of The China Connection — a snapshot of what I'm seeing and hearing from local businesses.For a few years now, lackluster consumer spending has underpinned many conversations around China. Against persistent exports growth, the domestic sales challenge has become more stark — and globally relevant. Is there a solution?The big storyConsumers in China have good reason to be cautious. For years, their disposable income grew at more than twice the rate of consumers in the U.S. Wind data going back to 2003 shows that until 2020, people living in Chinese cities could expect around 10% or faster growth in disposable income every year, far above the 3% average in the U.S.But that's slowed drastically in the last several years to 4.3% in 2025, barely better than the U.S. at 3.8%. Why the drop? A big factor, Macquarie's Larry Hu pointed out in a report Friday, is the sharp decline in home pr...