Eight months later, China is instead facing an accumulation of bad news: record youth unemployment, a deep housing slump, stagnant spending, even deflation.

That's a shock to many Chinese who are used to an economy that kept on expanding and living standards that rose with it. Now they're contending with slowing businesses and shrinking personal fortunes.

I talked to over a dozen business owners and consumers, as I have been doing for years, and I can report: Their confidence in the future of the economy and the country is at a nadir. If they had hoped for a rebound, that hope has been extinguished. They worry that it's the beginning of something they don't dare to imagine and fear that the government doesn't have solutions. The bad news just keeps coming.

"The most terrifying thing is that everyone around me is at a loss of what to do next," said Richard Li, the owner of an auto parts wholesale business. "I used to believe that our country would become better and better."

In the first half of 2023, the revenue of Mr. Li's business fell 15 percent from a year ago, when the city he lives in — with more than 10 million other people — was locked down for weeks.

He discovered that other companies like his were struggling, too. Some of his clients, auto repair shops, even shut their doors because car owners were reducing spending.

Mr. Li had four stores and closed two of them. He let go two-thirds of his employees and stopped investing in new products. He also cut back on dining out and hanging out with his buddies. Strapped for cash, he tried to sell an apartment he bought in 2020 as an investment. But there have been few queries, even after he cut the price to $400,000 from $500,000.