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 1,539 telephone interviews from May 1 to 18, 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 rebound of the stock market and the easing of the general price rises in May have helped improve consumer sentiment on personal finances in terms of both current conditions and future expectations, with no immediate impacts from the earthquake. The impacts of the earthquake were largely reflected in consumers' future expectations on business conditions: after the earthquake, consumer sentiment on the outlooks on one-year and five-year business conditions fell by 3 to 6 points. eziData will pay close attention to the changes in the next few months to determine the future trend.
The earthquake has had certain impact on consumers' allocation of their income. A comparison between the data before and after the earthquake showed a drop in the latter in terms of daily expenses as well as durable purchases, yet a rise in terms of savings and investments. Apparently, the disaster has stimulated consumers to reduce expenses and save more for emergency use, or to invest more to prepare for the long term. It is still too early to tell whether this was a temporary phenomenon or a lasting one, and the eziData analysts will keep tracking the data in the next few months.
The earthquake has also had impacts on consumers' expectations on the price rises. Upon the news of the earthquake, sentiment on future price rises kept rising, showing concerns on the part of the consumers about higher general prices under the earthquake impacts. eziData will keep tracking the trend in the next few months.
In terms of major cities, consumer sentiment in May fell sharply in Beijing and slightly in Shanghai, but rebounded in Guangzhou after a plunge in the city in April.
Sentiment among Beijing consumers went further down by a full 5.9 points in May to 89.3, becoming the lowest reading in consumer confidence among the three major cities, though it had been the highest reading the month before. And among the five components of the overall confidence index, all three constituting future expectations plunged, with the largest drop occurring in the five-year business outlook.
Sentiment among Shanghai consumers fell a slight 0.6 point to 93.5 in May after a 2.9-point rebound in April. Current conditions fell for the third month in a row, yet future expectations remained basically unchanged from the previous month. And among the five components of the confidence index, current personal finances as well as outlook on one-year personal finances fell, yet outlook on future business conditions kept rising, with the mid-long term business outlook rising by a full cumulative 15 points in the last two months.
Consumer sentiment in Guangzhou recouped 3.9 points to 92.2 in May entirely due to a strong rise in future expectations, as current conditions remained basically unchanged. And among the five components of the confidence index, a strong rebound in one-year personal finances was detected, while confidence in future business conditions improved only modestly.
Consumer Voices: *This is quite a year for China, with all the snow storms and earthquakes, and the rising food prices and falling stock prices. However, we are seeing a great government, and I am sure that with this government China will keep developing, and all this will go by.
