Mainland consumers more pessimistic this month

Consumer sentiment on the mainland became more pessimistic in August as confidence about personal finances and the employment outlook weakened, a survey found.

As the Chinese government has kept a tight grip on credit, economic activities have shown increasing signs of a slowdown due to sluggish demand. President Xi Jinping has emphasised that reforms and the anti-corruption fight will be deepened, which might curb the economic growth rate in the short run unless Beijing intensifies its stimulus policy, some economists believe.

The Westpac MNI China Consumer Sentiment Indicator fell to 113.3 from 114.8 in July and significantly below the 121.7 reading at the beginning of the year.

Current personal finances declined to 104.5 from 108.5 in the previous month, the lowest since July 2013. The employment outlook indicator fell below 100, the lowest since March.

While sentiment held above the 100 threshold, an indication optimists outnumbered pessimists, the reading was close to a historic low, Westpac and MNI said in a joint statement.

"From a balance sheet perspective, the risk appetite of consumers vis-à-vis their preferred investment classes increased marginally over July, but in absolute terms they continue to deploy their savings very conservatively," Westpac senior international economist Huw McKay said in the statement. He added that it would be unwise for the authorities to declare victory too early on the growth front.