Thu, Feb 21, 2019 - Page 11 News List

Brighter days could be ahead for PRC consumers

Bloomberg

Chinese consumer sentiment is at the lowest level in a decade, but a rebound is to come in the second half of the year, Morgan Stanley chief China economist Robin Xing (邢自強) said in an interview yesterday.

As China lacks a credible official consumer confidence gauge, Xing uses a weighted average of five indicators to check the pulse: Official retail sales, consumer lending, vehicle sales, air travel and restaurant catering.

That barometer slid to the lowest since 2008 toward the end of last year, he said.

Chinese consumers were beset on all sides, he added.

Last year, the government cracked down on risky peer-to-peer consumer lending, and the wealth effect from property values faded as the surge in property prices moderated.

Crucially, since October last year “people started to worry more about the job market, and the prospects for wages and employment,” Xing said.

In previous slowdowns, Beijing’s policymakers banked on the growing spending power of China’s massive population to cushion the blow, and the retail market is forecast to become the world’s largest this year even amid a deepening deceleration.

However, this time, the usually confident iPhone customers and SUV buyers have tightened their purse strings, sending shudders through multinational businesses around the world.

The silver lining is that “all those factors will improve later this year,” Xing said.

While the nation’s top leaders have boosted government spending in infrastructure and upstream sectors, all those will take time to filter down to the downstream private sectors, he said.

Many risky lending platforms have been shut down already, local governments have started easing property purchase restrictions and employment prospects would be boosted by the Chinese government’s stimulus package, Xing said.

Additional reporting by staff writer

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