Consumer confidence plummets in China
Following a trend that has brought strain and concern to people around the world, China’s consumer confidence is at its lowest in six years, with people tightening their belts due to the global crisis, state media has revealed.
In an indication of the wide-reaching affects of the global economic downturn, a confidence index compiled by local research group Horizon stood at 59.9 in December 2008, a decline of 4.5 points from September, the China Daily reported on Friday.
Last time the index was at a similar low was in 2003, when China was reeling from Severe Acute Respiratory Syndrome (SARS), that killed almost 350 people across the country and brought big cities to a standstill.
The Horizon poll of 3010 people in 10 cities showed that more than half intended to buy less this year.
The China Daily also quoted another survey showing 42% of people would cut or delay leisure travel this year.
China’s consumers are likely to hold out for longer than their western peers before surrendering to the crisis, because they finance their spending with savings rather than credit, economists believe.
However, other signs have emerged – in the first three days of January, a short New Year holiday in China, the nations top retailers reported 13% growth in sales over the same period in 2008.
While this looks high by most standards, it is down from the first 11 months of 2008, when retail sales were up 21.9% year-on-year.
For big brands that have spent up big making inroads into the country, like Ferrari and Absolut, this will be worrying news.