Inflation drives China's consumer confidence down in last quarter
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China's consumer confidence index fell for the second consecutive quarter in the last three months of 2010, said an agency of China's statistics bureau Wednesday.
The reading, compiled by the China Economic Monitoring and Analysis Center (EMAC) of the National Bureau of Statistics (NBS) and Nielsen Co., was at 100, down from 104 the previous three months, according to a report released by the EMAC and Nielsen at a press conference.
For the fourth quarter of 2010, only 30 percent of Chinese consumers considered "now" a good time to buy goods they needed, 11 percentage points down from the previous quarter, said the report.
The report said the decline in consumer confidence mainly stemmed from consumers' rising inflationary expectations, especially for food prices.
The joint study found 83 percent of consumers expected prices to rise further this year, 6 percentage points higher than in the previous quarter, while 84 percent said food prices would rise this year, also 6 percentage points up from the third quarter.
Pushed up by surging food prices, China's consumer price index (CPI), a major gauge of inflation, jumped to 4.9 percent year on year in January after reaching 3.3 percent for the full year of 2010, the NBS said.
High housing prices and rising interest rates also curbed private consumption, said the report.
"Rural consumers' confidence remained stable while the confidence of their urban counterparts dropped. China's consumer confidence was still remarkably higher than the global average level," said the report.
In spite of the decreasing confidence, Chinese consumers remained optimistic about their jobs and incomes, said the EMAC and Nielsen.
The report showed 54 percent of consumers considered the current employment situation "good" or "very good," 2 percentage points higher than the previous quarter, and 67 percent of consumers considered the employment situation in 2011 would be "good" or "very good."
About 62 percent of Chinese consumers expected their incomes in 2011 would be "good" or "very good," according to the report.
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