Chinese consumers shrug off impact of trade war on economy with increased spending to improve quality of life
- UBS survey shows that consumers were not only spending more on consumer goods and services, but they plan to increase it over the next 12 months.
China’s consumers, among the world’s biggest spenders on goods and services, appear determined to spend their way through their nation’s slowest economic growth pace in decades, even as Beijing’s tit-for-tat tariffs on US products add to the cost of imports.
One in three consumers said they were spending more money on consumer goods and services, and one in five said they would increase spending over the next 12 months, according to a UBS survey of 3,000 respondents in May. Both responses were more upbeat than a similar survey last year.
“We have seen consumers’ increasing penchant for buying goods and services that can improve their family members’ life and enhance health care,” said Christine Peng, the UBS analyst tracking the survey. “With or without the trade war, they are determined to spend more to achieve the goals.”
China’s retail sales rose 8.6 per cent in May when UBS conducted its survey, just as US President Donald Trump more than doubled his tariff on US$200 billion of Chinese products to 25 per cent. June retail sales rose 9.8 per cent from a year ago.
Monthly retail sales had increased year-on-year for more than a decade, soaring by 23.3 per cent in July 2008 through the depth of the Global Financial Crisis. The last time retail sales grew by a single percentage point was in June 2003, when the outbreak of the severe acute respiratory syndrome (Sars) kept people away from public places like shopping centres, cinemas and restaurants.