The FTCR China Consumer Index hit a record high at the start of 2018, with incomes rising and household views on the economy improving at their fastest pace since our survey began in July 2011. The headline index was up 1.6 points on December and 0.8 points higher than November’s reading, which was the previous high. Forward-looking measures of household incomes, discretionary spending and consumer views on the economy also improved at the start of the year.
Consumer confidence has been boosted by a combination of relatively robust economic growth and rising asset prices — house prices in particular. Their influence on consumer confidence will fade in 2018 as the government tries to tighten financial regulation and reduce credit availability as part of its clean-up of China’s financial system. Although the leadership is now stressing its determination to improve living standards and focus less on the rate of economic growth, household optimism is unlikely to remain at current levels without the quick fix of easy credit and a bubbling housing market.
The FTCR China Discretionary Spending Index increased 1.3 points over December to 78.2. Our Discretionary Spending Outlook Index moderated slightly, falling 0.8 points month on month.
Our Household Income Index rose 1.2 points to a record high of 81.1, while our income outlook index also hit a record high, gaining 0.8 points to 81.3.
Our Economic Sentiment Index rose 3.6 points versus December to a record high of 78.5. The index was 18.3 points higher than in January 2017. Our Economic Outlook Index rose 2.9 points to 84.4.
Respondents estimated their average cost of living rose 7.6 per cent year on year in January, down from 8.1 per cent in December. They expected their cost of living to rise 8.2 per cent year on year over the next six months, up from 7.3 per cent in December.
Our House Buying Sentiment Index improved 0.7 points month on month but was up 6.9 points year on year to 56.6, while our Property Investment Index moderated slightly, down 0.2 points month on month to 50.6 in January, but up 8.5 points year on year.
Indices measuring sentiment towards purchases of cars and clothing were both slightly below December’s levels but comfortably above year-ago readings. Our measure of sentiment towards buying watches and luxury jewellery hit a record high but remained just below the 50-point level separating improvement from deterioration.
Our A-share Buying Sentiment Index, measuring whether consumers perceive now to be a good time to invest in A-shares, improved 0.8 points in January, a relatively subdued performance given the Shanghai Composite Index’s rise since the start of this year.
Actual stock-buying intentions also improved slightly over December, with 39.1 per cent of retail investors saying they plan to buy stocks in the next three months, while buying sentiment towards funds and wealth management products also strengthened.
The FTCR China Consumer survey is based on interviews with 1,000 consumers nationwide. For further details click here. This report contains the headline figures from the latest Consumer survey; the full results are available from our Database.
FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and Southeast Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.