China, dolls & bubble tea in an age of tariffs

I’m not one for collecting dolls myself. But the wild buzz around Labubu around the world can even make someone like me stop and look.

Labubu is the name of a series of dolls produced by Pop Mart International, a Chinese toy manufacturer that broke through the $HK300 billion capitalisation barrier in May.

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Much of that recent growth was driven by Labubu, which has become a global phenomenon. The toy delivered more than $US400 million in revenue in 2024.

In many ways Labubu is a symbol of resilience in Chinese domestic consumption amid the ongoing trade dispute with the United States. China’s policymakers are counting on household spending to offset some of impact of the tariff-driven loss of US trade.

The size of that challenge became clearer when recent data showed Chinese retail sales missed market expectations in March. But tariff-resistant items like Labubu will go a long way to helping China achieve its goals.

I recently spent some time in Futian in downtown Shenzhen, China, and was struck by the popularity of simple retail items like Labubu, bubble tea and blind boxes.

From my time there, and what I’ve seen since, I believe there has already been a subtle improvement in Chinese consumer behaviour. You can hear my thoughts on a recent shopping trip in the video above.

Whatever the outcome of tariff talks, it's clear Chinese exporters will lose some of the US market, and outbound shipments to the region will slow. But no outside economy can place a tariff on domestic Chinese consumption. And we can all raise a bubble tea to that.

Raymond Yeung is Chief Economist, Greater China at ANZ