Willingness to spend declines to 12-year low
By Zhang Fengming |
March 17, 2011, Thursday
|
Print Edition
Print Edition
PEOPLE'S willingness to spend dropped to its lowest in 12 years recently despite more Chinese households being happy with price levels, a central bank survey showed yesterday.
Some 20,000 households in 50 cities were questioned in the survey and just 14.2 percent of respondents said they would spend more, the lowest level since 1999, the People's Bank of China said.
About 44.2 percent said they preferred to invest while 41.6 percent said they would rather save more.
Some 31.6 percent said they could tolerate current prices, a rise of 6.9 percentage points from the last quarter of 2010. Also, 47.1 percent of households said they expected prices to rise in the next three months, a drop of 14.3 percentage points.
"Containing inflation remains the priority," Ma Jun, chief economist with Deutsche Bank, said yesterday. "We reiterate our view that the consumer price index will likely peak in June."
China's CPI, a main gauge of inflation, rose a faster-than-expected 4.9 percent annually in February, the same as January. China is targeting inflation of around 4 percent this year.
JPMorgan said in a research note yesterday that it expects inflation to rise to 5.3 percent in March and keep rising until the middle of this year.
Home prices could be another barrier preventing people from spending.
About 74.4 percent of households said they found home prices "too high to afford," the second highest level since the quarterly survey began in 2009.
Though the central government has rolled out tough measures to curb home speculation, real estate still dominates as the most preferred investment option, followed by wealth management products, stocks and funds.
China's rising housing prices, fueled by speculators, has been a problem for the government. Higher down payments, limits on the number of homes a person can buy, higher interest rates and even a pilot project trying out a property tax have all been introduced to curb rising prices.
January saw new home prices rising year on year in 68 out of 70 major cities across the country, with 10 reporting an increase of more than 10 percent, the National Bureau of Statistics said.
Some 20,000 households in 50 cities were questioned in the survey and just 14.2 percent of respondents said they would spend more, the lowest level since 1999, the People's Bank of China said.
About 44.2 percent said they preferred to invest while 41.6 percent said they would rather save more.
Some 31.6 percent said they could tolerate current prices, a rise of 6.9 percentage points from the last quarter of 2010. Also, 47.1 percent of households said they expected prices to rise in the next three months, a drop of 14.3 percentage points.
"Containing inflation remains the priority," Ma Jun, chief economist with Deutsche Bank, said yesterday. "We reiterate our view that the consumer price index will likely peak in June."
China's CPI, a main gauge of inflation, rose a faster-than-expected 4.9 percent annually in February, the same as January. China is targeting inflation of around 4 percent this year.
JPMorgan said in a research note yesterday that it expects inflation to rise to 5.3 percent in March and keep rising until the middle of this year.
Home prices could be another barrier preventing people from spending.
About 74.4 percent of households said they found home prices "too high to afford," the second highest level since the quarterly survey began in 2009.
Though the central government has rolled out tough measures to curb home speculation, real estate still dominates as the most preferred investment option, followed by wealth management products, stocks and funds.
China's rising housing prices, fueled by speculators, has been a problem for the government. Higher down payments, limits on the number of homes a person can buy, higher interest rates and even a pilot project trying out a property tax have all been introduced to curb rising prices.
January saw new home prices rising year on year in 68 out of 70 major cities across the country, with 10 reporting an increase of more than 10 percent, the National Bureau of Statistics said.
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