China's spending picks up in Q1 as sentiment improves

By Yang Kunyi Source:Global Times Published: 2019/5/13 18:38:40

Middle-class women become a driving force in China’s consumption

A notice about tax is displayed on the shelves of a supermarket in Kuala Lumpur on Wednesday. Malaysia on Wednesday began implementation of a 6 percent consumption tax aimed at plugging a leaky tax-collection system and addressing a widening fiscal deficit, but the move has sparked consumer unease. Photo: AFP

China's shoppers remained active in the first quarter of 2019, with a measure of consumer sentiment standing near a record high of 115, a two-point increase from the fourth quarter of 2018, a report showed. 

Experts noted that steady consumption, while pushing for a supply side upgrade, bodes well for the steady growth of China's economy. 

According to the report, released by global performance management company Nielsen on Friday, the Consumer Trend Index (CTI) has three components -- job prospects, willingness to spend and personal financial conditions, all of which improved significantly from the prior quarter. 

Job prospects increased five points to 79 points. Willingness to spend increased three points to 61, and personal finance was up three points to 70. 

Nielsen noted that the CTI of middle-class women reached 130 points, way above the national average. Middle-class women also spent more on personalized and entertainment products, according to the report. 

Tian Yun, vice president of the Beijing Economic Operation Association, told the Global Times that the growing spending power of middle-class women can be the driving force of the Chinese economy and upgrade the supply-side structural reform in China. Such shoppers have higher demand when it comes to their material and spiritual needs. 

"Middle-class women tend to pursue personalized and individualized spending. Whether it's for personal enjoyment or spending on education for themselves or their children, they tend to see it as an investment that can potentially yield long-term returns," Tian said.

Increased consumption ability was made possible by the improvement of the macro economy this year in China. According to figures released by the National Bureau of Statistics in April, first-quarter GDP expanded 6.4 percent to hit 21.3433 trillion yuan ($3.11 trillion). 

Favorable policies, including those that aim to stabilize employment and raise living standards, also contributed to the improvement of the consumption environment, according to the report. 

On April 23, the State Taxation Administration said that China's tax cuts had saved individuals and companies 341.1 billion yuan, stimulating consumption and allowing people to buy higher-end products.

The upgraded demand in consumption not only sustained the economy, it also encouraged the upgrade of products in the market, according to Tian.

"Currently, supply is not meeting the upgraded demand for better and more personalized products, especially in smaller cities," Tian said. "As a result, consumption is pushing an upgrading on the supply side."

Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, told the Global Times that steady domestic consumption is stabilizing the economy, especially during the trade dispute with the US. 

"High-end consumer demand has created new room for economic growth," Dong said.
Newspaper headline: Spending picks up in Q1 as sentiment improves


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