|
Chinese consumers' appetite for big-ticket items like houses and cars has subsided a little, according to a quarterly confidence survey released by the National Bureau of Statistics Monday.
China's overall consumer confidence index in September slid to 94.3 points, from 94.6 in June. The index stood at 94.4 points in March.
However, consumer confidence in the economy rose by 2 percentage points in the third quarter to 54 percent, according to the report.
The report also shows that the proportion of respondents indicating an intention to buy cars dropped to 10 percent, 3 percentage points down from June, while the proportion of potential home buyers fell two percentage points from June to 16 percent.
Zhuang Jian, a senior economist at the Asian Development Bank, attributed the drop in the consumer confidence index to a combination of factors other than macro-economic concerns.
"Consumer confidence can be influenced by a wide range of factors, including personal income and expenditure, and growing worries about the inadequacies of the social welfare system," he said.
"The rising cost of education and medical treatment is keeping many Chinese families from spending their earnings like they did before.
"The rising savings figure clearly indicates that many families are keeping a bigger portion of their earnings in the bank."
He explained that consumer credit is relatively under-developed in China.
Many Chinese consumers still feel uncomfortable using credit cards and other loans schemes to make large purchases.
"Chinese consumers are less likely than their Western counterparts to run up big debts to buy a car or a house," he said.
Zhuang also pointed out that the unpredictable income level for many farmers has further complicated the survey results.
"Farmers' incomes differ according to their location, and are influenced by many unforeseeable factors. Harvests are highly dependent on climatic shifts and policy changes have added an extra element of uncertainty," he said.
Figure from the National Bureau of Statistics for 2003 show the average annual household expenditure in rural areas was 1,943.3 yuan (US$234).
That figure for rural areas around Beijing was 4,147.3 yuan (US$500), while in Guizhou Province, in southwestern China, this figure was only 1,185 yuan (US$143).
Changes in the consumer confidence index are crucial to macro-economic development because of the importance of consumption expenditure to gross domestic product (GDP) growth.
Latest government figures show that consumption expenditure accounted for over 53.6 percent of GDP last year, down 1.8 percentage points from the year before.
"Shrinking consumption will make our economic development more and more dependent on exports and investment," Zhuang said.
In the long term "we must boost consumption to achieve more balanced and stable economic growth," he said.
(China Daily October 11, 2005)
|
