According to a survey conducted by Bank of America Corp., Chinese consumers continue to hold a pessimistic view of the country’s economy, despite recent improvements in economic data. The survey highlighted a decline in expectations for future income, with fewer respondents anticipating a wage increase compared to two months ago. Furthermore, the survey revealed that only 31% of participants plan to increase their spending in the next six months, down from 37% in the previous survey.
These findings contradict the optimistic outlook reflected in recent economic data, which prompted several Wall Street banks to revise their growth predictions for China. It emphasizes the necessity for additional stimulus measures from the government, particularly as policymakers are reportedly contemplating expanding fiscal policy.
Although sentiment among residents of Tier-1 cities has shown slight improvement, consumers in Tier-2 and smaller cities remain predominantly negative. The survey also unveiled a pessimistic view of the property market, as there was a significant increase in the number of respondents expecting home prices to decline in the next year. Despite the housing stimulus measures implemented by authorities, intentions for future home purchases or upgrades remain stagnant.
The results of this survey align with a recent study conducted by Morgan Stanley, which found that over 80% of Chinese households are still hesitant to enter the property market. This indicates a lack of confidence among consumers regarding their plans to invest in property.
Moreover, the Bank of America survey suggests that consumer sentiment is likely to moderate following the recent holidays, as participants indicated potential cuts in spending on furniture, travel, and luxury apparel or footwear. This implies that consumers may become even more cautious with their expenditures in the coming months.
Overall, the survey results highlight Chinese consumers’ persistently pessimistic outlook on the country’s economy. Despite some positive indicators in economic data, concerns about future income and the property market are dampening consumer sentiment. This underscores the urgency for the government to implement further stimulus measures in order to boost consumer confidence and stimulate economic growth.
