Despite slowing economic growth, Chinese consumer confidence is at its highest level since 2005. According to Nielsen’s Global Survey of Consumer Confidence and Spending Intentions, China ranked the fourth most optimistic among the survey’s 56 country participants in the first quarter of 2012. Overall, consumers in the countries surveyed were more confident than they were last quarter.
Nielsen Greater China’s President Yan Xuan credited the PRC government’s support for small- and medium-sized enterprises—including credit expansion, domestic consumption and demand-growing policies, and management of the real estate bubble—for Chinese consumers’ confidence.
The survey also showed that rural consumers made up China’s most confident consumer segment. Rural consumer confidence has been increasing for four straight quarters. In addition, consumer goods spending in China’s rural areas have increased more than the national average this quarter.
Xuan said central government policies, such as providing subsidies for farmers’ health insurance and plans to increase investment in agriculture and rural areas, also help explain the segment’s confidence.
Rural consumers and second-tier cities accounted for the largest uptick in spending this quarter; consumer confidence in tier-one, -three, and -four cities remained the same. While Chinese consumers are optimistic about the job market and higher income expectations overall, their willingness to spend remained flat. In fact, the Nielsen survey showed that 49 percent of those consumers would rather put spare cash directly into savings or education for their children, up from 41 percent in the previous quarter.
Nielsen’s survey is just one of several consumer confidence indices measuring China’s consumption. The PRC National Bureau of Statistics (NBS) publishes its own consumer confidence survey, which dates back to the 1990s. But the NBS’ lack of transparency with the survey’s methodology has led corporations to create their own indices. China UnionPay, marketing firm Aegis Group plc, and the People’s Bank of China all publish consumer confidence indices targeted for China as well.
Nielsen polled more than 28,000 consumers around the world, reaching 3,500 Chinese consumers. India ranked first in global consumer confidence, followed by Saudi Arabia, Indonesia, the Philippines, and China. The United States, which ranked 22nd, jumped nine points this quarter.