Chinese consumers haven’t been cooperating with the government’s goal of making consumption the nation’s predominant economic engine.
Consumer sentiment in May unchanged at 111.1 from last month -- the lowest since November and close to a four-year nadir, according to the Westpac MNI China Consumer Sentiment Index. April’s reading of 111.1 was just above the low of 110.8 set in September 2011, based on records dating back eight years.
“Slowing growth in the Chinese retail sector reflects the real economy, and the trend isn’t showing many signs of change,” Yuan Gangming, an economist at the Chinese Academy of Social Sciences, said in an interview. “Look for the government to make more moves to boost consumption.”
Mindful of sluggish spending, officials in Beijing cut taxes on imported goods including sports shoes and cosmetics effective June 1. Decelerating growth can be seen in urban incomes, corporate profits and government revenue, Yuan said.
Catherine Lim, a senior retail analyst for Bloomberg Intelligence in Singapore, said people are counting on the government to pick up growth.
“There seems to be a fair amount of optimism that a deterioration in economic conditions could be countered by new government policies,” she said in an e-mail.
Another positive is China’s world-beating equity rally. The Shanghai Composite Index has gained more than 140 percent the past year, including more than 10 percent since the start of this month.
China’s household consumption expenditure as a proportion of gross domestic product was 34.1 percent in 2013, the lowest of any major economy, according to the World Bank. The U.S. figure for 2013, the most recent on the World Bank’s website, was 68 percent.
— With assistance by Haixing Jin