CHINA CON­SUMERS ’RICHER THAN DATA SUG­GESTS’

Govt may have un­der­es­ti­mated cit­i­zens’ true spend­ing power by as much as 20pc

New Straits Times - - Business -

BEI­JING

That’s be­cause the of­fi­cial sam­pling isn’t good enough to re­flect the af­flu­ence house­holds have gained through in­vest­ment re­turns, CASS says.

And house­holds are the most op­ti­mistic they’ve been in more than two years, a pri­vate con­sumer con­fi­dence re­port re­leased yes­ter­day showed.

“We’re richer than the data sug­gests, and the po­ten­tial for spend­ing is big­ger than it looks,” said Zhao Wen, a labour eco­nom­ics an­a­lyst lead­ing the re­search. “Con­sump­tion will con­tinue to be an im­por­tant driver for eco­nomic ex­pan­sion in the fu­ture.”

The shift is re­flected by the new cham­pi­ons of the na­tion’s econ­omy: not in­dus­trial giants but re­tail and ser­vices in­no­va­tors.

Ten­cent Hold­ings Ltd and Alibaba Group Hold­ing Ltd have be­come China’s largest cor­po­ra­tions in the past year.

The chal­lenge for pol­i­cy­mak­ers led by Pres­i­dent Xi Jin­ping now is to keep dis­pos­able in­come ris­ing even while they’re try­ing to de­flate prop­erty mar­ket bub­bles and crimp the amount of lever­age dur­ing the longer-term slow­down of the world’s sec­ond-largest econ­omy.

Suc­cess isn’t au­to­matic. As China faces stiffer wage com­pe­ti­tion from its neigh­bours, wage growth is mod­er­at­ing.

Growth of me­dian per-capita dis­pos­able in­come de­cel­er­ated to 6.7 per cent in the first quar­ter, down from 8.3 per cent last year and slower than gross do­mes­tic prod­uct ex­pan­sion for the first time since the Na­tional Bu­reau of year and that num­ber was ex­pected to rise to 50 mil­lion by the end of the year, said the China E-Com­merce Re­search Cen­tre.

With the pa­tience of po­lice and pedes­tri­ans wear­ing thin, some firms have ap­pointed staff to pa­trol streets.

But the star­tups, in­clud­ing lead­ing ri­vals Mo­bike and Ofo, may soon need to com­ply with stricter reg­u­la­tions. Sta­tis­tics (NBS) be­gan releasing a gauge cov­er­ing both ru­ral and ur­ban house­holds in March 2014.

The NBS pays a ro­tat­ing sam­ple of around 160,000 house­holds across the na­tion to re­port their daily in­come and spend­ing habits, gen­er­at­ing quar­terly data on how much they can spend.

Yet per­suad­ing peo­ple to be hon­est about their wealth is no easy task, and it’s al­most im­pos­si­ble to track how much peo­ple earn through in­vest­ment of stocks and prop­er­ties.

“Poorer peo­ple, such as those de­pend­ing on a liv­ing al­lowance, need to let oth­ers know they’re short of money, while those in pos­ses­sion of prop­er­ties, sav­ings and se­cu­ri­ties are re­luc­tant to re­veal the size of their wealth,” said Zhao. Bloomberg

The Trans­port Min­istry on Mon­day re­leased a draft pro­posal on rules re­quir­ing lo­cal gov­ern­ments to bet­ter man­age the boom­ing bike-share in­dus­try.

It calls for the de­vel­op­ment of ded­i­cated park­ing zones near ma­jor trans­porta­tion hubs, shop­ping ar­eas and of­fice blocks, and ad­vises lo­cal author­i­ties to make some ar­eas off-lim­its for bike park­ing. AFP

AFP PIC

Chi­nese author­i­ties, are con­sid­er­ing new reg­u­la­tions to curb the bike chaos — from cap­ping the num­ber of bikes to even bar­ring peo­ple they con­sider too big or too small for bi­cy­cles.

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