SHANGHAI, Sept. 26 /Xinhua-Finance/ -- Xinhua Finance eziData China Consumer Confidence Index (CCCI) was updated today, with the survey results showing that Chinese consumer confidence rebounded slightly in September, as continued strong investment returns boosted buying sentiment, offsetting in part continued concerns on rising prices and renewed concerns about current and future personal finances. On the other hand, as the 17th China Communist Party Congress drew near, Chinese consumers have developed an inclination to wait for further news on policies, hence a stagnation in their confidence.
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The Xinhua Finance eziData China Consumer Confidence Index inched up 0.3 points to 101.0 in September, indicating a wait-and-see attitude on the part of consumers.
Current conditions rose 0.6 point to 100.3 in September, as a 3.7-point gain in sentiment on durable purchases offset a 2.3-point drop in sentiment on current personal finances. Stronger investment returns since the end of July have helped boost sentiment on purchasing large durable goods and cars. Meanwhile, consumer prices are seen nearing their peak following the 10-year high posted in August, with the outlook for prices a year from now falling.
Under the support of the Xinhua Finance family, Xinhua Finance eziData China Consumer Confidence Index is produced monthly by eziData, a local provider of China consumer data, and in association with Dr. Richard Curtin. Dr. Curtin is Research Professor and Director of the Consumer Sentiment Surveys at the University of Michigan's Institute of Social Research. The survey this month was conducted through 1,530 telephone interviews from September 1 to September 16. April 2007 survey results are set as the benchmark value of 100. More on the survey methodology can be found in the accompanying section.
Consumers remained optimistic about the stock market given the recent series of record highs. Even the dramatic fall on September 11 had no effect on sentiment, as consumers seemed to remember the market's rebound following the government's attempt to stem price rises in late May.
Differences in spending behavior between income groups became more evident this month. Lower income consumers shifted funds to daily expenses due to rising prices, while higher income consumers continued to increase investment. Boosted by the continued rises of the stock market, the trend of fund flow to investment from daily expenses which first appeared in August became more evident this month.
Future expectations remained basically unchanged in September, rising 0.2 point to 101.4, due to an improvement in the northern part of East China, which has offset the falls in other regions. A 1.2-point rebound in the one-year business outlook has offset a 0.5-point decline in the one-year outlook for personal finances, the fourth drop in as many months. The five-year business outlook remained stable, with only a 0.1-point loss from last month.
Overall confidence among those earning less than RMB 48,000 per year climbed in September by 1 point to 97.1, with both current conditions and future expectations rising. Among those making more than RMB 48,000 per year, however, overall confidence declined by 0.5 point to 104.6, as a drop in future expectations offset a gain in current conditions.
Confidence among older consumers (aged 55-64) showed a strong 3.7-point gain in September to 98.7, the highest level in the six-month history of the index. Future expectations rose 5.1 points as a result of the recent government promise to raise pension levels each of the next three years. Confidence among the middle-aged (35-54) inched up 0.4 point to 97.2, led by a 0.7-point gain in current conditions, due to good investment returns from the stock market. Confidence among young consumers (aged 20-34), however, declined by 0.3 point, after a 1.8-point drop in August, yet remained at the highest level among age groups.
Regional Trends
Consumer sentiment showed a strong rise in the northern part of East China in September but posted further declines in the central and southern parts of East China. Sentiment in Middle & West China rose slightly.
Sentiment in the northern part of East China, including Beijing, rose 2.6 points to 102.1, the highest level since June, as a strong 4.4-point gain in future expectations more than offset a 0.7-point drop in current conditions. Future expectations in September fully recouped the losses posted in the previous two months, pushing the subindex to its highest level in survey history. This was probably due to the expectations that the government would take steps to further curb house prices. Such expectations have been reinforced recently by government action to help solving housing problems of lower-income urban families as well as to increase the supply of lower-priced homes, especially in Beijing. The confidence rebound in the lower income group in this region was much stronger than that in the higher income group.
Sentiment in the central part of East China, including Shanghai, fell by 1.2 points to 98.6 in September, with both current conditions and future expectations declining for the third consecutive month. All components of current conditions declined for both income groups. The drop in future expectations was due mainly to lower outlooks for business conditions both in one year and in five years among higher-income households.
Confidence in the southern part of East China remained at a low level in September, with a slight 0.2-point drop after a 2.3-point fall in August. While current conditions improved by 1.2 points, future expectations fell by another 1.1 points after a 2.8-point decline last month. Both one-year and five-year business outlooks declined for the second straight month, probably due to the continued impact of the government's July 1 policy change to discourage exports of low-value-added products in the region's Pearl River Delta.
Consumers in Middle & West China, on the other hand, were still quite optimistic, with the confidence index inching up 0.2 point to 102.6, as a 1.9-point gain in current conditions more than offset a 0.7-point decline in future expectations. While sentiment levels for the one-year and five-year business outlooks have declined slightly in the last two months, they remain higher than in other regions.
Trends in Major Cities
Consumers in Beijing were more confident in September than in August, while their counterparts in Shanghai and Guangzhou remained relatively pessimistic.
Sentiment among Beijing consumers rebounded 2.9 points to 100.9 in September, as a 0.7-point drop in current conditions was overwhelmed by a strong 4.9-point gain in future expectations, due mainly to a rebound in the future business outlook. Future expectations in Beijing have fluctuated sharply since the survey began in April, due to uncertainty about the region's medium- to long-term business prospects following the 2008 Olympics.
Sentiment among Shanghai consumers rebounded a slight 0.6 point in September after having fallen 5.9 points the previous two months, but the 97.3 index level was still the lowest of the three major cities. Current conditions fell by 1.7 points in September, while future expectations climbed by 1.9 points. Although concerns on medium- to long-term business outlook were soothed somewhat by recent government policy moves to increase the supply of houses, the wait-and-see attitude among consumers was still quite strong given that previous government attempts to control housing prices were largely unsuccessful.
In Guangzhou, consumer confidence fell to 98.5 in September, the second straight monthly decline of 2.2 points. In contrast to August, the decline in September was mainly due to a sharp 5-point deterioration in current conditions, which had been stable above 100 from April to August. Future expectations declined for the second straight month in September, but much less than in August.
Apr. May Jun. Jul. Aug. Sept.
2007 2007 2007 2007 2007 2007
INDEX OF CONSUMER
SENTIMENT
ALL CHINA 100 102.2 101.6 102.0 100.7 101.0
EAST CHINA 99.8 102 102.1 101.5 100.2 100.4
EAST CHINA: NORTH 100.2 101.1 102.1 100.8 99.5 102.1
EAST CHINA: CENTRAL 100 101.5 102.1 100.5 99.8 98.6
EAST CHINA: SOUTH 99.4 103.2 102 103.1 100.8 100.6
MIDDLE & WEST CHINA 100.6 102.8 100.2 103.1 102.4 102.6
INDEX OF CONSUMER SENTIMENT WITHIN INCOME SUBGROUPS (ANNUAL
HOUSEHOLD)
Under RMB 48,000 95.5 97.1 95.8 96.7 96.1 97.1
Over RMB 48,000 105.2 106 106.4 106.9 105.1 104.6
INDEX OF CONSUMER SENTIMENT WITHIN
AGE SUBGROUPS
20-34 104.2 105.9 105.9 107.0 105.2 104.9
35-54 96.4 99.2 98.3 98.1 96.8 97.2
55-64 95.8 97.7 95.5 95.7 95.0 98.7
COMPONENTS OF THE INDEX OF CONSUMER
SENTIMENT
Current Index 100 103.1 101.4 100.2 99.7 100.3
Expectations Index 100 101.7 101.6 102.9 101.2 101.4
Personal Finance:
Current 123.8 129.2 126.8 122.2 122.2 119.9
Personal Finance:
Expected 128.9 131.9 130.4 129.1 128.8 128.3
Business Condition:
1 Year 135.1 134.8 134.7 137.8 134.3 135.5
Business Condition:
5 Years 149 153.4 154.6 158.1 155.0 154.9
Durable Buying
Conditions 103.4 105.1 103.4 105.5 104.3 108.0
INDEX OF SECTORS
Index of Stock
Investment 100 99.8 100.1 101.0 105.9 108.3
Index of Real Estate 100 97.8 99.9 100.1 98.5 97.2
Index of Car Purchase 100 104.1 100.3 98.5 95.4 96.8
Selected Consumer Voices:
-- My salaries are increased and my investments are increased. Although
prices are higher my life is still OK.
-- House prices will definitely go up. You are better off even if you buy
a house and lease it to someone else.
-- Cars will depreciate. Car prices are acceptable but gasoline is too
expensive.
-- We are confident about the (Wenzhou) government. They are doing a good
job managing the city as providing good business conditions.
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Methodology
Xinhua Finance eziData China Consumer Confidence Index is produced in association with Dr. Richard Curtin, Research Professor and Director of the Consumer Sentiment Surveys at the Institute of Social Research, University of Michigan. The index is based on a monthly survey of around 1,500 Chinese households via stratified random sampling in 50 representative cities across East, Middle and West China using the same methodology as is used by the University of Michigan. All data is collected via computer assisted telephone interviewing (CATI). Index of April 2007 survey is set as the benchmark (100).
About Xinhua Finance Limited
Xinhua Finance Limited ("XFL") is China's premier financial information and media service provider and is listed on the Mothers Board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China's financial markets and the world, Xinhua Finance's proprietary content platform, comprising Indices, Ratings, Financial News, and Investor Relations, serves financial institutions, corporations and re-distributors worldwide. Through its subsidiary Xinhua Finance Media Limited (NASDAQ: XFML), XFL leverages its content across multiple distribution channels in China including television, radio, newspaper, magazine and outdoor media. Founded in November 1999, XFL is headquartered in Shanghai, with offices and news bureaus spanning 11 countries worldwide.
About eziData
eziData is a local provider of China consumer data, serving both financial and consumer market participants. It aims to serve global and local business professionals with decision-making tools that relate to consumption in China and conform to international standards. eziData's comprehensive portfolio of high-quality consumer data products, which includes a structured real-time databank, delivers a broader and more insightful view of the market. For more information, please visit http://www.eziData.com .
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