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Consumer spending tendency lowest in 12 years
By Zhang Fengming |
March 16, 2011, Wednesday
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Online Edition
Online Edition
CHINESE consumption tendency dropped to a 12-year low though more households are satisfied with price levels, a central bank survey showed today.
China's central bank polled 20,000 household in 50 cities in the first quarter and only 14.2 percent of the respondents said they would spend more, the lowest level since 1999, said the People's Bank of China yesterday on its website.
About 44.2 percent of respondents said they preferred to make an investment and another 41.6 percent said they would rather deposit more in banks.
The waning spending tendency came despite indication that household inflation expectation eased.
About 31.6 percent of respondents said they could tolerate current prices, 6.9 percentage points more than a quarter ago. Also, 47.1 percent of households said they expect prices to rise in the coming quarter, down 14.3 percentage points from the fourth quarter.
"Containing inflation remains the priority," Deutsche Bank China Chief Economist Ma Jun said today. "We reiterate our view that CPI will likely peak in June."
China's consumer price index, the main gauge of inflation, rose a faster-than-expected 4.9 percent year on year in February, the same as January. China is targeting to keep its whole-year inflation at around 4 percent this year.
On investment, real estate still dominates as the most preferred investment option, followed by wealth management products, stocks and funds.
About 74.4 percent of households said they found home prices "too high to afford," the second highest level since the data was compiled in the first quarter of 2009.
China's highflying housing prices, fueled by speculators, has been a stubborn problem for government. That's why China rolled out its toughest measures to cool the red-hot real estate sector. Higher down payments, limits on the number of homes a person can buy, higher interest rates and even a pilot project for the property tax were all aimed at reining in runaway home prices.
January saw new home prices rising year-on-year in 68 out of the 70 major cities monitored across the country, with 10 of them reporting a hike of more than 10 percent, the National Bureau of Statistics said.
As for existing home prices, 65 of the 70 cities secured year-on-year gains in January with six climbing by more than 10 percent. The rest dropped.
In another central bank survey on 3,000 bankers, 66.1 percent of respondents said the country's monetary policy would be further tightened in the next quarter, 15.8 percentage points higher than a quarter before.
China shifted its monetary policy from accommodative to prudent this year. Money supply is targeted to grow 16 percent this year, with new yuan lending estimated to grow 7.5 trillion yuan this year.
China's central bank polled 20,000 household in 50 cities in the first quarter and only 14.2 percent of the respondents said they would spend more, the lowest level since 1999, said the People's Bank of China yesterday on its website.
About 44.2 percent of respondents said they preferred to make an investment and another 41.6 percent said they would rather deposit more in banks.
The waning spending tendency came despite indication that household inflation expectation eased.
About 31.6 percent of respondents said they could tolerate current prices, 6.9 percentage points more than a quarter ago. Also, 47.1 percent of households said they expect prices to rise in the coming quarter, down 14.3 percentage points from the fourth quarter.
"Containing inflation remains the priority," Deutsche Bank China Chief Economist Ma Jun said today. "We reiterate our view that CPI will likely peak in June."
China's consumer price index, the main gauge of inflation, rose a faster-than-expected 4.9 percent year on year in February, the same as January. China is targeting to keep its whole-year inflation at around 4 percent this year.
On investment, real estate still dominates as the most preferred investment option, followed by wealth management products, stocks and funds.
About 74.4 percent of households said they found home prices "too high to afford," the second highest level since the data was compiled in the first quarter of 2009.
China's highflying housing prices, fueled by speculators, has been a stubborn problem for government. That's why China rolled out its toughest measures to cool the red-hot real estate sector. Higher down payments, limits on the number of homes a person can buy, higher interest rates and even a pilot project for the property tax were all aimed at reining in runaway home prices.
January saw new home prices rising year-on-year in 68 out of the 70 major cities monitored across the country, with 10 of them reporting a hike of more than 10 percent, the National Bureau of Statistics said.
As for existing home prices, 65 of the 70 cities secured year-on-year gains in January with six climbing by more than 10 percent. The rest dropped.
In another central bank survey on 3,000 bankers, 66.1 percent of respondents said the country's monetary policy would be further tightened in the next quarter, 15.8 percentage points higher than a quarter before.
China shifted its monetary policy from accommodative to prudent this year. Money supply is targeted to grow 16 percent this year, with new yuan lending estimated to grow 7.5 trillion yuan this year.
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