China’s consumer recovery still dubious as nearly 60 per cent of households prefer to save
- China’s central bank says that 58 per cent urban residents were in favour of saving more than spending in the first quarter
- Residents who said they were inclined to spend more increased 0.5 percentage points from the previous quarter to 23.2 per cent
Most Chinese households still prefer to save than spend, new central bank data shows, a blow to government efforts to revive consumption after dropping hardline Covid restrictions late last year.
Lingering concerns about jobs and income continue to be the primary reasons for the caution, the People’s Bank of China (PBOC) said in a quarterly survey of 20,000 depositors released on Monday.
It found that 58 per cent urban residents were in favour of having more deposits in the first quarter, down 3.8 percentage points from the fourth quarter of last year.
Residents who said they were inclined to “spend more” increased 0.5 percentage points from the previous quarter to 23.2 per cent. About 18.8 per cent of people said they would “invest more”, up 3.3 percentage points from the final quarter of 2022.
China’s economy has been slowly recovering in the aftermath of zero-Covid restrictions and outbreaks, but consumption remains a weak link.
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China's slow road to economic recovery after dropping its zero-Covid policies
Beijing has prioritised reviving consumer spending, which accounted for only about a third of economic growth last year, versus half from investment.