Western companies are increasingly counting on China to deliver growth not available elsewhere, but the country’s consumers remain reluctant to boost their domestic spending, according to a survey of consumer attitudes published by the Economist Intelligence Unit, the Financial Times reported.
“Chinese consumers, both urban and rural, although optimistic about the future, remain big savers and cautious spenders, despite their government’s concerted effort to stimulate domestic demand,” the EIU said.
In spite of a Rmb4,000bn ($589bn) stimulus package, targeted tax breaks and other incentives to boost sales of cars and appliances in rural areas last year, “concerns about healthcare, education and retirement continue to restrain consumption”.
Rural Chinese remain frugal when it comes to spending on items from white goods to cars, because they are focused on providing their own safety net for health costs and retirement, the survey found.
The EIU concluded that while 91 per cent of respondents said they were optimistic about the future – a much higher number than in other countries – even well-off urbanites save a very high percentage of their household income.
Two-thirds of Shanghai residents save a quarter or more of their household income (compared with under 15 per cent for the hardly profligate Swiss), and a third save 35 per cent or more. In less developed smaller cities, the figures are even higher.
Among the half of the rural respondents who do not own a refrigerator, only 40 per cent plan to buy one, and a third of those see it as a distant purchase. “This suggests that more needs to be done to address their broader concerns about the future before programmes aimed at stimulating consumer demand can be more effective,” the EIU said. Read more. (Subscription required.)
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