Chinese consumer confidence remains weak in fourth quarter as Beijing looks for answer to economic worries
- Consumer fears about impact of trade war on jobs and incomes hit spending
- Analysts suggest pressure on incomes and personal spending will grow in 2019
Chinese consumer confidence sat at a low level in the fourth quarter of 2018 and is still well below where it was a year ago due to greater worries about a slowing economy amid the trade war with the United States, according to a survey compiled by Beijing-based Capital University of Finance and Economics released on Wednesday.
The consumer confidence index stood at 99.4 in the October-December period last year, compared with 99.3 in the previous quarter – but well below the 105.1 of the last quarter of 2017. Readings above 100 indicate that consumers, on balance, are optimistic, while readings below 100 show that they are not, according to the survey.
The Chinese government has been counting on strong domestic consumer spending to help offset the effects of the trade war with the US. However, increasing worries about jobs and incomes have caused many consumers to cut back their discretionary spending. This “consumption downgrade” was evident in retail sales figures for November, which fell to their lowest level in 15 years.
The latest confidence data indicate that the mood of consumers has not improved, suggesting their spending will continue to underperform government expectations.
The fourth quarter consumer confidence data, which was collected from mid- to late December, may have been given a boost by the announcement by Chinese President Xi Jinping and US President Donald Trump on December 1 that they had agreed a 90-day truce in the trade war. That directly addressed one of the main worries burdening consumers.