Consumer confidence slumps
By Wang Yanlin |
July 5, 2011, Tuesday
|
Print Edition
Print Edition
THE Shanghai Consumer Sentiment Index fell in the second quarter of this year to a two-year low due to rising inflation, a weak stock market and a flurry of natural disasters, a survey showed yesterday.
The index dropped to 101.2 in the April-June quarter, down 4.8 points from the first three months and 4 points lower from a year earlier, according to the Shanghai University of Finance and Economics, which publishes the quarterly survey.
A reading above 100 signals consumers are positive about the economy while one below reveals negative sentiments.
The reading in the second quarter was close to the lows recorded during the global financial crisis.
Xu Guoxiang, the research program leader and director of the university's Applied Statistics Research Center, said the latest index was a combined result of runaway consumer prices, a weak stock market and natural disasters.
"After a short-lived rebound in the first quarter, the index dropped to a level close to negative, indicating consumers are not very optimistic," Xu said.
China's Consumer Price Index, the main gauge of inflation, rose 5.5 percent from a year earlier in May. It was the fastest pace in 34 months, and some economists said they expect inflation to reach 6.3 percent in June due to recent rises in pork prices.
The Shanghai Composite Index shed more than 1.6 percent in the first half of this year. It was one of the worst performing markets in Asia and even underperformed the Nikkei 225 average in quake-battered Japan.
Also, droughts and floods roiled central and east China, ruining crops and driving up prices of agricultural products.
"Policy makers should roll out new measures to stabilize consumer confidence," Xu said. "The priority should be to control inflation and raise incomes."
He added the property issue is of special importance and the government should continue to be strict with real estate tightening policies.
The index dropped to 101.2 in the April-June quarter, down 4.8 points from the first three months and 4 points lower from a year earlier, according to the Shanghai University of Finance and Economics, which publishes the quarterly survey.
A reading above 100 signals consumers are positive about the economy while one below reveals negative sentiments.
The reading in the second quarter was close to the lows recorded during the global financial crisis.
Xu Guoxiang, the research program leader and director of the university's Applied Statistics Research Center, said the latest index was a combined result of runaway consumer prices, a weak stock market and natural disasters.
"After a short-lived rebound in the first quarter, the index dropped to a level close to negative, indicating consumers are not very optimistic," Xu said.
China's Consumer Price Index, the main gauge of inflation, rose 5.5 percent from a year earlier in May. It was the fastest pace in 34 months, and some economists said they expect inflation to reach 6.3 percent in June due to recent rises in pork prices.
The Shanghai Composite Index shed more than 1.6 percent in the first half of this year. It was one of the worst performing markets in Asia and even underperformed the Nikkei 225 average in quake-battered Japan.
Also, droughts and floods roiled central and east China, ruining crops and driving up prices of agricultural products.
"Policy makers should roll out new measures to stabilize consumer confidence," Xu said. "The priority should be to control inflation and raise incomes."
He added the property issue is of special importance and the government should continue to be strict with real estate tightening policies.
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