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Shanghai consumers regain confidence in Q1

Shanghai's consumer confidence in the first quarter recovered from a record low in the last quarter of 2008 as more people were willing to buy vehicles and other consumer durables thanks to government stimulus measures.

The Shanghai Consumer Confidence Index hit 98.9 points in the first three months of this year, up 4.7 points from the quarter before, according to a quarterly report released by Shanghai University of Finance and Economics yesterday. But the index was still 4.8 points lower from the same period last year.

An index reading of more than 100 points indicates consumers are positive about the economy while that below 100 points signals the opposite.

''Consumer confidence has recovered from the bottom of a declining trend, though people are still generally holding a rather negative attitude about the economic scenario,'' said Xu Guoxiang, director of the university's applied statistics research center and the research program leader.

The number of people who think now is a good time to buy vehicles rose 10 percent while 7.7 percent more see the next six months as an ideal time, the report said.

Xu attributed the increase in consumer confidence to the implementation favorable vehicle purchase tax policy and also to the decline in crude oil prices.

In January, China halved the sales tax on sedans with engines of 1.6 liters and below to 5 percent. Sales rose 21.9 percent to 1.41 million units in the first quarter.

But the report said that consumers are still taking a wait-and-see attitude as far as buying houses is concerned because of uncertainties in housing prices.

Consumers expressed an increasing willingness to buy houses in the next 6 months because of the 60,000 apartments scheduled to be available for sale to low-income residents in the second half of the year.

The survey asked about 1,000 consumers aged 20 to 69 and 1,000 individuals about their attitude toward the city's economic prospects, their income and investment and purchasing intentions.


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