China Consumer Confidence Rebounds in August, Concerns on Future Price Rises Ease

August 26, 2008 | 10:42 pm

SHANGHAI, China, Aug. 26 /Xinhua-PRNewswire/ -- Xinhua Finance eziData China Consumer Confidence Index (CCCI) was updated today, with the survey results showing that China Consumer Confidence Index rebounded 0.9 point to 92.9 in August after a 3.1-point plunge in July. Current conditions fell further by a slight 0.8 point to 90.1, while future expectations rose by 1.8 points to 94.4, and concerns on future general price rises eased. This was in tandem with the initial results of the August Consumer Sentiment Survey by Reuters/University of Michigan in the US, which reported a 0.5-point rise in the overall consumer confidence to 61.7, with a 3.8-point drop in current conditions to 69.3 and a 3.8-point rise in future expectations to 56.8. Concerns on future general price rises were also reported to have eased.

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Under the support of the Xinhua Finance family, Xinhua Finance eziData China Consumer Confidence Index is produced monthly by eziData, a local provider of China consumer data, and in association with Dr. Richard Curtin. Dr. Curtin is Research Professor and Director of the Consumer Sentiment Surveys at the University of Michigan's Institute of Social Research. The survey this month was conducted through 1,540 telephone interviews from August 1 to 15, 2008. April 2007 survey results are set as the benchmark value of 100. More on the survey methodology can be found in the accompanying section.

In the last couple of weeks, quite a number of economists pointed out that the Olympics would not become a divide of China's development progress. And this was partly proved in the survey results of this month's consumer confidence: the opening of the Olympics did not show a major impact on the consumer confidence of the month. Instead, changes in the consumer confidence index were more related to the changes in lasting factors, such as the stock market, general prices, and the subprime mortgage crisis. Consumer confidence on current conditions fell again in August as a result of the dives (again) of the stock market and rises (again) in general prices (as can be inferred from a re-falling consumer satisfaction with current general prices after two months' consecutive rises). Future expectations, on the other hand, rebounded this month, led by an improvement in the expectations on future business conditions.

On the other hand, consumers' concerns on future price rises eased in August despite of the falling satisfaction with current prices. The percentage of consumers who expected general prices to rise in the year ahead went down by eight percentage points from that of the previous month, while that of those who expected general prices to fall in the year ahead went up by six percentage points from the month before. Expected increase in general prices in the year ahead also went down by two percentage points from the last month. All this showed a similar trend as that among the US consumers on future general price expectations as reported in the initial August survey results of the Reuters/ University of Michigan Consumer Sentiment Survey.

Consumer Voices:

"I have a relatively stable job and decent income, so I planned to make some investment. Then I realized how fast stocks and funds were falling, and that bank deposits resulted only in negative interest rates, and prices are rising so fast¡­ I better spend the money to make my life more comfortable."

"The global economic environment is bad, and the China government does not have a second key project for investment like the Olympics. I guess economy might slow down in the following period. But so long as the regulatory policies are appropriate, I believe the economy will continue to improve."

"Houses are expensive, and house prices might fall further. Banks are tightening their mortgage policies so I might as well wait instead of buying a house now."

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Methodology

Xinhua Finance eziData China Consumer Confidence Index is produced in association with Dr. Richard Curtin, Research Professor and Director of the Consumer Sentiment Surveys at the Institute of Social Research, University of Michigan. The index is based on a monthly survey of around 1,500 Chinese households via stratified random sampling in 50 representative cities across East, Middle and West China using the same methodology as is used by the University of Michigan. All data is collected via computer assisted telephone interviewing (CATI). Index of April 2007 survey is set as the benchmark (100).

Notes to editors:

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About eziData

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