Rising food prices see cut in spending
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Chinese bankcard holders trimmed their non-essential spending in May due to rising food prices caused by a drought that ravaged central and eastern China, an industry index showed on Thursday.
The bankcard consumer confidence index dipped to 86.11 in May, down 0.28 point from a year ago. It also slipped 0.69 point from April, said China UnionPay Co yesterday.
The index had risen for three straight months before May's decline.
The index tracks expenses of card users, including 200,000 individuals, in affluent cities who frequently use the cards to pay for 90 percent of their expenses. A higher index signals that more bankcards are being used to pay for non-necessity expenditure such as luxury goods and travel.
"Bankcard holders are cutting non-necessity consumption as the rise in food prices pushes them to shop less, apart from basic needs," the Shanghai-based firm said in a statement.
Prices of pork and vegetables rose as central and eastern China were hit by a drought that lasted two months, UnionPay said.
Data from the Ministry of Agriculture showed the agricultural products wholesale index rose to 186.3 at the end of May from 180.1 at the start of the month.
The decline in auto sales in the country in May also hit consumer confidence.
Passenger car sales fell 6 percent to 1.01 million in May from April on the expiry of incentives, high fuel prices and output cuts by some Japanese auto makers due to the March earthquake and tsunami.
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