AS exporters feel the heat of the trade war, China's powerful domestic-consumption engine was supposed to provide some protection for investors in the nation's stocks.

That's not working out so well. A narrative that's captured traders' attention in recent weeks has been a "consumption downgrade" in the world's second-biggest economy. With official data already showing retail sales growth slowing, investor alarm increased when China's biggest liquor maker, Kweichow Moutai Co, reported its weakest profit expansion in almost three years.

Moutai alone lost 212 billion yuan (S$42.3 billion) in market value over six days last month. And stocks of companies that sell less discretionary items have done even worse. The Shenzhen CSI 300 Consumer Staples Index slid 22 per cent in October, its worst month since the 2008 global financial crisis.

Dai Ming, a fund manager at Hengsheng Asset Management Co in Shanghai, is among those who have bailed on China's consumer story for now. He sold off his portfolio of those stocks earlier this year, in favour of financials.