Household confidence rises on economic recovery
Print Edition
CHINESE household confidence rebounded to a two-year-high on economic recovery and strong real estate market in smaller cities, a survey revealed yesterday.
The China Wealth Index, compiled every two months by Bank of Communications and research firm Nielsen, rose to 140 in July from May’s 135, which was the second highest on record. A reading above 100 reflects optimism among over 1,800 households interviewed.
A sub-index measuring people’s willingness to invest in real estate rose for the first time in eight months along with strong home sales in June.
“Home sales in smaller cities rose as policies to boost home purchase there took effect,” said Lian Ping, chief economist of the Bank of Communications. “But it is questionable whether the recovery is sustainable.”
Lian said home prices in smaller cities are generally reasonable and banks are expected to approve more mortgages in these cities as buying a home is restricted in large cities.
The monetary authorities’ stance of “mild deleveraging” also boosts investment sentiment in real estate as well as the financial market.
A sub-index measuring people’s willingness to invest in liquid assets, including wealth-management products, securities, insurance policies and precious metals, increased 6 points to 141.
Households expected their income to improve mainly due to higher investment returns as a sub index measuring income growth increased 5 points from May to 152.
Meanwhile, people's confidence over the economy also rose 6 points to 138, the highest since 2015.
Official data showed that China's second-quarter GDP rose a better-than-expected 6.9 percent year on year, the same pace as the first quarter.
International organizations including the International Monetary Fund, J.P. Morgan, Nomura Securities, Asia Development Bank, and Standard Chartered Bank tuned up forecast of China's GDP growth for the year by between 0.1 and 0.2 percentage points.
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