China consumer sentiment dips in December

Consumer sentiment in China dipped after rising in the previous two months, but stayed at the second highest level since June, a new survey showed on Friday. This indicates that the world’s second largest economy is still on a firm track for a recovery.

The MNI China Consumer Sentiment Indicator dropped slightly to 95.4 from 95.5, yet a future expectation indicator increased for the fourth consecutive month to 95.0 from 93.7, the survey showed. Consumers’ willingness to buy large household items and cars eased in December, though remained relatively strong, the survey showed.

Stock market sentiment rose for the second consecutive month to its highest level since June as current stock prices were seen as more favourable, the survey found. Yet the gauge still showed “deep net pessimism”.  The benchmark Shanghai Composite Index lost 23 per cent last year and 30.2 per cent in 2011.

Real estate market sentiment dropped as price expectations fell sharply, the survey revealed. “Sentiment on whether it is a good time to buy a house remained unchanged in December, while that for selling a house rose,” the survey said.

Expectations for business conditions in a year and in five years were different. The one-year business condition outlook dropped while the five-year outlook increased to the highest level since June, the survey found.

China’s non-manufacturing purchasing manager’s index was at 56.1 in December after a 55.6 reading in the previous month, according to China’s Statistics Bureau on Thursday. The growth is the fastest year-on-year pace in four months, indicating the nation is well poised for an economic rebound.