Chinese consumer sentiment softens on worsening personal finances

Mainland Chinese consumer confidence softened to record lows this month, as personal finances deteriorated, according to a joint statement issued by Westpac and MNI.

The consumer sentiment index in China declined to 112 in February from 112.1 in January, the survey showed. It has been hovering around the record low of 110.8 in September 2011.

“While there has been a stabilisation in confidence in recent months following the decline in 2014, sentiment remains at a historically low level,” said Philip Uglowm, chief economist of MNI Indicators. “So far there’s sparse evidence that the more accommodative policy stance has had a material impact on our respondents.”

“Current Personal Finances” fell to the weakest since December 2011, while “Expected Personal Finances” also worsened, giving up all the gain in January, the statement said. The weakest sentiment was reported by the higher-income households and the 55-64 age group, while lower income households and the young were more positive, the statement said.

Confidence in the housing market improved a bit, with house price expectations rising notably over the month and an increasing share of respondents saying they believe that real estate is the best place to park savings. However, sentiment differed substantially by region, the statement said.

“Chinese consumers are dealing with conflicting emotions at present, with the bottoming in the property market in the coastal areas and a somewhat improved employment and business outlook juxtaposed with continued unease regarding their personal financial situation,” Westpac’s senior international economist Huw McKay said.