Chinese Consumers "Chinese Economy Likely to Worsen" Despite Improvement in Economic Indicators

40% of Consumers Expect Housing Prices to Fall
"No Plans to Buy a House Within 6 Months"
Luxury Goods Consumption Also Decreases

Chinese consumers continue to hold a negative outlook on the future economy despite improvements in China's economic indicators and signs of a recovery.

Bank of America (BofA) revealed this after surveying 1,023 Chinese consumers from the 6th to the 8th, finding that the proportion of respondents expecting wage increases fell from 29% in August to 26% this month.

Only 31% of consumers said they would increase spending within the next six months, a decrease from 37% in August.

Outlook on the real estate market also worsened. The percentage of consumers expecting housing prices to decline rose sharply from 27% in August to 40% this month. Despite the Chinese government's real estate stimulus policies, the proportion planning to purchase a home within six months remained similar to August levels. In this survey, 80% of respondents stated they have no plans to buy real estate within six months.

This result has drawn attention as it comes amid Wall Street's recent upward revisions of China's annual growth forecasts. On the 5th, Citigroup and JP Morgan raised their annual economic growth forecasts for China from 4.7% to 5%, citing China's stimulus policies and improved economic indicators. They noted signs of a rebound in the Chinese economy following the Mid-Autumn Festival and National Day holidays. In fact, the Purchasing Managers' Index (PMI) for manufacturing, released by China's National Bureau of Statistics for September, rose 0.5 percentage points from the previous month to 50.2%, surpassing 50 for the first time in six months. A PMI above 50 indicates economic expansion, while below 50 signals contraction.

There are also market expectations that the Chinese government may introduce fiscal stimulus measures as early as this month. Major foreign media outlets such as Bloomberg reported that the Chinese government plans to issue an additional 1 trillion yuan (approximately 184 trillion won) in government bonds to achieve this year's growth target of 5%. Until now, the Chinese government has avoided large-scale monetary easing policies due to concerns over fiscal deficits.

However, Chinese consumers are tightening their belts despite signs of economic recovery. BofA stated, "In this survey, respondents indicated they might reduce spending on luxury goods such as high-end clothing, furniture, travel, and shoes," adding, "The tendency to have a negative economic outlook was stronger in smaller cities."

This content was produced with the assistance of AI translation services.