Consumer sentiment on current conditions inched up 0.1 point to 90.2, supported by stable general prices which were manifested in a relatively stable consumer satisfaction with current prices (only slightly lower than the month before). However, consumer sentiment on future expectations plunged 3 points to 91.4, creating a new low as well as the largest month-on-month fall in survey history since April 2007. The sharp fall in consumers’ future expectations was mainly due to the fast deterioration of the subprime mortgage crisis – such as the take-over of Freddie Mac and Fannie Mae by the US government, as well as the bankruptcy of Lehman Brothers - which made consumers in China worry about the future of China’s business conditions.
Under the support of the Xinhua Finance family, Xinhua Finance eziData China Consumer Confidence Index is produced monthly by eziData, a local provider of China consumer data, and in association with Dr. Richard Curtin. Dr. Curtin is Research Professor and Director of the Consumer Sentiment Surveys at the University of Michigan’s Institute of Social Research. The survey this month was conducted through 1,520 telephone interviews from September 1 to 15, 2008. April 2007 survey results are set as the benchmark value of 100. More on the survey methodology can be found in the accompanying section.
The September survey was completed on September 15. After that, the US government released a program of US$ 700 billion to save the market, and the central government of China also issued a series of policies in the same effort. According to eziData analysts, this is very likely to cause a strong rebound in consumer confidence in October. However, the mid-long term trend in consumer confidence will be subject to the future trend in the subprime mortgage crisis as well as that in the stock market and real estate market in China.
Consumer Voices:
"I really shouldn’t buy a house and a car at the same time. The mortgage could kill you. And the prices are rising so fast that I could hardly meet my expenses with my income."
"The appreciation of RMB has undermined export with raised costs. Company performance is getting poor. And now the US is coming with the subprime mortgage crisis. I guess the economic growth will slow down."
"The house price rose so much last year, and only lowered a little this year. Who knows if it will go down again? I’d better wait and see."
