Con­sumer sen­ti­ment holds up even as eco­nomic growth slows

China Daily (Canada) - - BUSINESS - By CHENG YINGQI andHUYUANYUAN

Chi­nese con­sumer con­fi­dence re­mained high in the third quar­ter even though eco­nomic growth fell to the slow­est pace since the 2008 global fi­nan­cial cri­sis.

Re­search firm Nielsen said on Thurs­day that its con­fi­dence in­dex of Chi­nese con­sumers stood at 111, mark­ing the fourth con­sec­u­tive quar­ter at that level.

GDP growth in the third quar­ter was 7.3 per­cent, down 0.2 point from the sec­ond quar­ter, theN­ational Bureau of Statis­tics has re­ported.

“Thenum­beris a very en­cour­ag­ing sign for the fu­ture con­sumer-led econ­omy we are all look­ing at,” said Pa­trick Dodd, man­ag­ing di­rec­tor of Nielsen China.

“When we look at the con­sumer con­fi­dence in­dex, we are re­ally look­ing at peo­ple’s in­ten­tions on con­sump­tion. And when you look at GDP, that is just a much wider case. There are some cor­re­la­tions, but I would not look at them too closely,” Dodd said.

The con­sumer con­fi­dence in­dex is based on three key fac­tors: job prospects, per­sonal fi­nance­sand­will­ing­ness to spend, saidDodd.

“Wage in­fla­tion is mov­ing at a very nice pace, and­with­alow­in­fla­tion rate, dis­pos­able in­come is at a very good level. The gov­ern­ment fo­cuses on jobs across all ci­ties, so the job prospects for peo­ple across all tiers are look­ing quite bright.

“This com­bi­na­tion of more dis­pos­able in­come, low in­fla­tion and job prospects be­ing high all con­trib­ute to the high level of con­sumer con­fi­dence,” he said.

Ac­cord­ing to the NBS, the real dis­pos­able in­comes of ur­ban res­i­dents in 28 provin­cial­level ar­eas rose by 6.9 per­cent dur­ing the first three quarters of this year. The re­port also found that: • Con­sumer con­fi­dence lev­els among city tiers and re­gions have been con­verg­ing since the first quar­ter of 2014.

• There are four su­per ur­ban clus­ters that are strate­gi­cally cru­cial to China’s eco­nomic growth: Shang­hai-Hangzhou-Nan­jing, Bei­jingGuangzhou-Shen­zhen and Ji­nan-Qing­dao.

• The key driv­ers of ris­ing will­ing­ness to spend vary among re­gions, while dif­fer­ent re­gions also tend to have some­what dif­fer­ent spend­ing pat­terns. For ex­am­ple, con­sumers in richer north­ern ci­ties spend more on prod­ucts that will im­prove their life qual­ity, such as cloth­ing, din­ing out and tele­phone fees.

“Spend­ing de­ci­sions re­ally de­pend on the de­vel­op­mentsta­tus of­con­sumersin dif­fer­ent re­gions and ar­eas in such a dy­namic mar­ket as China,” Dodd said.

“If you just take a look at what hap­pened on Tues­day, the Sin­gles’ Day, it is a good in­di­ca­tion that peo­ple are will­ing to spend their money on prod­ucts they de­sire.”

Dur­ing the an­nual Nov 11 Sin­gles’ Day e-com­merce event, on­line sales on Alibaba GroupHold­ing Ltd’s Tmall.com, Taobao.com and its over­seas out­lets topped 57.1 bil­lion yuan ($9.34 bil­lion). Con­tact the writ­ers at chengy­ingqi@ chi­nadaily.com.cn and huyuanyuan@ chi­nadaily.com.cn

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