Consumer confidence in Hong Kong rises as China economy stabilises

Consumer confidence in Hong Kong has bounced back from a five-month low as a stabilised mainland economy gives retailers renewed optimism, a new index shows.

Researchers believe the recovery is due to the launch of the Shanghai-Hong Kong Stock Connect on November 17, which helped offset the negative impact of the pro-democracy Occupy movement.

"We believe that China's economy has stabilised, so Chinese consumers will start to spend again," said Raymond Yeung Yu-ting, senior economist of the Australia and New Zealand Banking Group, which compiled the index with Australian research company Roy Morgan. "Hong Kong's tourism has not finished yet."

The survey, published yesterday, shows Hong Kong's consumer confidence level has risen to 131.2 points this month compared to 128.5 points last month - the lowest point since June.

However, the researchers said Hong Kong still faced the challenges of a withering luxury products market - largely due to China's economic slowdown and anti-graft campaign - and the emergence of the mainland's e-commerce market.

But as the mainland middle class continues to expand, resulting in more robust consuming power, they say rising numbers of mainland shoppers will come to Hong Kong to buy daily household products seen as having better quality and credibility.