China’s economic strategy is taking a bold new turn, and it’s all about the 'winter economy'—a term that’s suddenly on everyone’s lips. But here’s where it gets controversial: while some see it as a game-changer, others fear it’s a risky gamble that could lead to overcapacity and wasted resources. Could this be the key to reviving China’s sluggish economy, or is it a recipe for disaster? Let’s dive in.
The Rise of the Winter Economy
Imagine a ski resort north of Beijing, once struggling to attract visitors, now thriving as a symbol of China’s latest economic push. Luo Li, the 64-year-old owner of the Wanlong ski resort in Chongli, has seen his fortunes turn dramatically. Two decades ago, his resort had more staff than customers. Fast forward to today, and Wanlong is profitable for the second year in a row, thanks to China’s hosting of the 2022 Olympics, which brought new infrastructure and a surge in visitors. Luo’s success story is no accident—it’s a blueprint Beijing hopes to replicate across various service sectors.
But here’s the twist: China’s state media is aggressively promoting the “winter economy” as the next big thing, projecting it to grow to a staggering 1.5 trillion yuan ($217 billion) by 2030. Provinces are jumping on the bandwagon, announcing plans to invest in everything from winter sports facilities to nightlife and medical tourism. Beijing is clearly shifting its stimulus focus from traditional sectors like transport and housing to services, hoping to unlock latent consumer demand and revive consumption—a long-standing weak spot in China’s economy.
And this is the part most people miss: While the strategy sounds promising, it’s not without risks. China is relying on its old supply-side playbook, betting that building infrastructure will automatically create demand. But analysts warn this approach could lead to the same problems plaguing its export-focused economy: overcapacity and wasteful spending. Tommy Xie, head of Asia macro research at OCBC Bank, puts it bluntly: “China has no shortage of examples where overinvestment resulted in underutilized or abandoned assets.”
The Local Push for Services
Local governments are already in motion. Jilin and Hebei are expanding winter sports facilities, Henan is boosting its “night-time economy,” and Hainan is promoting yachting and medical tourism. Even Beijing is focusing on education, healthcare, and childcare. The question is, will these investments pay off, or will they become white elephants?
The Human Side of the Boom
Chongli, once a sleepy agrarian town, is now a bustling hub. Its economy has grown at an average of 6.5% annually over the past five years, outpacing national figures. Locals like Yan Jingyi, a 23-year-old ski instructor earning over 10,000 yuan monthly, and Ren Bing, a taxi driver making 9,000 yuan, are reaping the benefits. “Life is much better than before,” Ren says. But not everyone is thriving. The hashtag “poor people skiing” has gone viral on Chinese social media, highlighting the affordability gap for many.
The Bigger Picture
China’s shift to services comes at a critical time. Soft consumer demand and lagging income growth are holding the economy back. While the services sector could unlock new opportunities, it’s not a silver bullet. Fred Neumann, chief Asia economist at HSBC, cautions: “Overincentivising supply can lead to excess capacity, with demand ultimately unable to meet expectations.”
The Controversial Question
Here’s where it gets even more interesting: Should the state sector lead this charge, or should it step back and let the private sector take the reins? Some analysts argue that excessive government involvement could stifle innovation and deter foreign investment. Louis Kuijs, chief Asia economist at S&P Global Ratings, suggests: “If the investment climate is right, the government can and should leave expansion to the private sector.”
Your Turn
What do you think? Is China’s focus on the “winter economy” a brilliant move or a risky gamble? Could this strategy revive its economy, or will it lead to more problems? Share your thoughts in the comments—let’s spark a debate!
