Chinese consumer confidence plunged in November due to the sharp
fall in the stock market as well as uncurbed rises in consumer
prices and home prices, said a report by Xinhua Finance Ltd and
eziData yesterday.
The China Consumer Confidence Index compiled by the two
companies fell 1.9 points in November to 98.9, the lowest level in
the history of the survey, which started in April this year when
the benchmark value was set at 100.
The survey was conducted through 1,547 telephone interviews from
November 3 to November 19 by Xinhua Finance Ltd, a financial
information and media service provider and the local China consumer
data provider eziData.
The index plunge followed people's views of current conditions,
which declined 3.1 points to 97.4. This in turn was led by a
7.3-point fall in current personal finances, due to losses in stock
investments as well as concerns over soaring consumer prices.
The Shanghai Composite Index, which tracks yuan-denominated A
shares and hard-currency B shares, dropped 1.21 percent to 4,803.39
points yesterday, compared with a record-high 6,124.04 points on
October 16.
Negative factors
Consumer prices, a major tool to measure inflation, surged 6.5
percent last month from a year earlier, the highest since the
seven-percent rise recorded in December 1996.
With no signs of easing negative factors, such as skyrocketing
home prices and the appreciation of the yuan that may affect export
competitiveness, consumer expectation fell by 1.2 points to 99.6,
lower than in April.
The sharp fall in the stock market also broke consumers'
expectations for future investment returns, causing a 2.9-point
drop in the one-year outlook for personal finances.
"However, since the drop in consumer confidence this month is
mainly due to the decline in the stock market - and since the
market is still expected to improve in the longer run - we do not
expect confidence to show a large fall in December," said the
report.
In Shanghai, sentiment on current conditions reported a sharper
drop of 2.6 points to 99.8 because of severer losses on the stock
market, since there are more stock-holders in Shanghai than
fund-holders, compared with Beijing and Guangzhou.
(Shanghai Daily November 29, 2007)
