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Survey Shows Rise in Consumer Confidence
China saw an increase in its consumer confidence, according to MasterIndex, MasterCard International's biannual survey on consumer confidence. However, experts warned that several factors, including a decline in foreign trade, might dampen confidence for the next half of 2001.
Last week, the MasterIndex indicated that the Chinese mainland had the highest consumer confidence index of the 13 Asia/Pacific markets.
With an index of 79.1, the Chinese mainland was almost 35 points higher than Hong Kong Special Administrative Region (HKSAR), and 70 points higher than Japan, which had the lowest index of the survey.
The survey covered a total of 5,494 consumers during June 2001, MasterIndex sources said.
MasterCard economists believe Malaysia, Singapore, Hong Kong, Indonesia, Taiwan and Japan, with current MasterIndex ratings below 50, reflect some degree of anxiety among respondents.
These economies are dependent on the US economy, and have been greatly affected by the world economic recession, according to Willie Fung, regional general manager of MasterCard International in charge of the Chinese mainland, Hong Kong, Macao and TawanChina.
However, huge domestic consumption in China helped offset the negative effects of the external economic recession and is gaining momentum as the survey results suggest, according to Hedrick Wong, another MasterCard economist.
"The country is expected to fulfill or even exceed the projected 7 per cent GDP growth rate if the global economy does not worsen further and the domestic consumption keeps growing,'' the survey said.
Such high expectations of China's performance in the next half of the year in turn help maintain consumer confidence within the country.
However, despite such optimism, Yuan Guoliang, a macro-economic researcher with Haitong Securities, warned that overly stressing domestic consumption may overshadow the importance of exports.
China registered over 600 billion yuan (US$72.3 billion) in GDP growth in 2000, to which export growth contributed about 30 per cent, Yuan said.
"I believe the decline of the exports will definitely dampen the country's economy,'' he said.
Another difficulty remains as to how domestic consumption in China should be further enlarged to offset the negative effects of the sharp decline in exports, said Pan Zhengyan, a researcher with the Shanghai Academy of Social Sciences.
Sources: China Daily
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