Small restaurants in China are facing significant financial difficulties due to reduced consumer spending amid economic uncertainty and concerns over household incomes. Many independent eateries are operating on thin margins, with some reporting losses and facing closure. This downturn, which began in mid-2025, has persisted despite seasonal expectations. Cautious spending behavior is attributed to worries about income stability and falling asset values, making it hard for businesses, especially family-run ones, to sustain operations amidst deflationary pressures.