China Boosts Its ‘Night Economy.’ Investors Should Pay Attention.

Local governments in China now encourage citizens to stay out late—and spend. Here: night shopping in Chengdu. (Dreamstime)

At 1 a.m. on a muggy Friday night in Chengdu, clusters of young people gather under neon lights to eat skewers, sip bubble tea, and livestream their outings. The city recently extended metro hours on weekends, while district officials subsidize vendors who operate well past midnight. It’s all part of China’s newest consumption push: the “night economy.”

China’s leaders are running out of traditional tools to lift growth. Infrastructure spending is burdened by debt, the property market remains sluggish, and households are wary of big-ticket purchases. Local governments now encourage citizens to stay out—and spend. Chengdu, Guangzhou, and Wuhan have all issued policy packages to boost nighttime activity, ranging from tax breaks for restaurants to dedicated late-night shopping festivals.

The Ministry of Commerce estimates that after-dark consumption accounts for roughly 30% of urban retail sales, a share officials want to raise. Last month, Beijing designated 300 “national model night districts,” spanning bars, cinemas, and snack streets. The aim: to make nighttime spending a pillar of urban growth, especially among younger Chinese who are less inclined to buy homes or cars.

“Young people already like hanging out late—it’s part of our culture now,” says Liu Wei, a 25-year-old designer in Chengdu who spends weekends at open-air bars and street stalls. “If the city makes it easier and safer to be out, we’ll spend more.”

The policy is quirky but not without precedent. China has long experimented with consumer-focused campaigns, from Singles’ Day e-commerce promotions to cash-back programs for EV purchases. The night economy fits into Beijing’s broader shift toward “demand-side management,” a phrase that appeared in recent policy documents.

For investors, the move could provide marginal upside in sectors from restaurants to transport. Hot pot giant Haidilao International Holding has been promoting its 24-hour locations as a draw for students and shift workers. State-owned operators of subways and buses in tier-one and tier-two cities are likely to see incremental traffic from extended hours. Logistics companies, including food-delivery platforms like Meituan and Ele.me, are also positioning themselves as nighttime facilitators.

“The nighttime economy has become a new engine to enhance cities’ vitality and promote China’s development,” said Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences.

But there are clear constraints. Extending business hours adds labor and energy costs. Many night markets cater primarily to young people on tight budgets, who might spend on skewers and beer but not on durable goods. Some economists worry that subsidies simply shift consumption from daytime to nighttime, rather than creating new demand.

Local governments, however, see value in vibrancy itself. Wuhan announced grants for businesses that keep their doors open past midnight, along with cultural events such as late-night concerts and street performances. In Guangzhou, officials are promoting “night parades” where retailers offer flash discounts every hour until 2 a.m. The thinking is that such spectacles not only generate sales but also boost tourism and create jobs.

“I usually finish work around 10 p.m., and before there was nowhere to go except home,” says Zhao Ming, a 28-year-old retail employee in Wuhan. “Now I meet friends at the riverside market, and we can eat, shop, even buy clothes. It feels like the city is more alive.”

China’s experiment is unfolding against a backdrop of stubbornly weak consumer sentiment. Retail sales grew just 3.2% year-over-year in July, well below prepandemic norms. Surveys show households remain cautious, with many preferring to save. Analysts argue that without stronger income growth and greater confidence in the economy, piecemeal campaigns like the night economy will have limited effect.

Still, cultural shifts matter. The popularity of “city walks”—strolling through urban neighborhoods at night for leisure—has dovetailed with official campaigns. Nighttime livestreaming, already a booming
e-commerce channel, is seeing record engagement, according to Douyin, TikTok’s sister app. Online influencers routinely sell cosmetics, clothing, and gadgets well past midnight, linking social trends to actual consumption.

For listed companies, the question is how durable the spending will be. Restaurants like Jiumaojiu International Holding, retailers such as Miniso Group Holding, and transport operators in major cities could see modest gains. Real estate developers are also eyeing “night economy districts” as a way to repurpose underused commercial space. But skeptics caution that any rally in these names should be viewed through the lens of short-term policy enthusiasm rather than structural change.

“Nighttime economic activities such as dining, night tours and shopping provide richer consumption scenarios,” said Hong Yong, associate research fellow at the Chinese Academy of International Trade and Economic Cooperation. “The expansion of nighttime consumption scenarios will help…effectively stimulate domestic demand and promote sustained economic growth momentum.”

Back at the Chengdu market, Liu Wei isn’t thinking about GDP or policy targets. She is livestreaming her friends over skewers and laughing at the comments flowing in from viewers. “People just want to enjoy life a bit,” she says. “If that helps the economy, even better.”

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