China’s consumers reluctant to spend income despite need to offset trade war impact, survey shows
- People’s Bank of China survey of 18,600 residents from 31 provinces shows income constraints and preference for saving money trump willingness to spend
- China has gradually shifted towards a consumption-driven growth model in recent years, but government needs to offer more incentives to overcome obstacles
China will need to come up with more incentives to convince consumers to spend to support economic growth, the results of a survey by the central bank released on Wednesday suggested.
Consumers surveyed by the People’s Bank of China (PBOC) reported that income constraints and a preference to save money amid economic uncertainties were limiting their spending.
Chinese consumers generally prefer not to spend their income immediately, with a large proportion of those surveyed responding that they instead save money for their children’s education and their own retirement, according to the PBOC’s survey of consumer’s financial knowledge and behaviour which is conducted every two years.
Some 79.03 per cent of respondents disagreed with the view that “we should spend all the money earned today” and instead wanted to save their income for the future. The result was slightly lower than the reading of 79.4 per cent to the same question in the 2017 survey.
A total of 44.23 per cent said they were now saving or had saved in the past for their children’s education, up nearly 3 percentage points from two years ago, while 32.85 per cent said they had plans to do so in the future.