Confidence rises to 7-year high
Mainland consumers have signalled stronger confidence in the economy but still remain cautious about their spending, according to a Nielsen survey released yesterday.
Consumer confidence rose to a seven-year high in the first quarter, making the country the fourth most optimistic nation in the 56 markets surveyed.
But mainlanders' willingness to spend remained flat and they still prefer to put their money in banks or save for their children's education.
According to the survey, 59 per cent of mainland respondents put spare cash into savings, compared to 56 per cent in the previous quarter. And the percentage choosing to save money for children's education grew to 49 per cent from 41 per cent in the previous quarter.
Meanwhile, willingness to spend on clothes, food, entertainment and holidays dropped compared with the previous quarter, although it was higher than the first quarter of last year.
Recently released official data shows that mainland economic growth declined to 8.1 per cent, the lowest in five quarters, partly due to flagging demand from export markets and by a prolonged credit crunch in the property sector.
Retail sales growth slowed to 14.1 per cent in April, the lowest in 14 months.
Many economists believe domestic consumption will rebound in the second half, with inflation stabilising and the macro-economic environment improving.
'Inflation is considered to be easing amid a stabilising economy and as the government's easing policies begin to take effect,' said Yan Xuan, president of Nielsen Greater China.
The country's inflation in April eased to 3.4 per cent year on year, from a three-year peak of 6.5 per cent in July last year, according to government data.
Compared to people elsewhere, mainland consumers were more optimistic about the economy, job prospects and personal finances.
The Nielsen survey of 3,500 people showed that consumers in rural areas were the most confident, largely because the central government has launched a series of support measures to encourage development in these areas.
By contrast, confidence in the wealthiest cities, provincial centres and county seats remained lacklustre. Only second-tier cities - which generally include regional economic centres - saw an uptick.
Stimulating domestic consumption has been a priority for Beijing in recent years. The State Council on Wednesday said the country had earmarked 26.5 billion yuan (HK$32.5 billion) in subsidies this year for energy-saving home appliances in an effort to encourage spending and cut carbon emissions.