China consumer sentiment rose slightly in January, survey shows

Tomohiro Ohsumi | Bloomberg | Getty Images

Consumer sentiment nudged up in China in January, as an improvement in the outlook for personal finances offset downbeat expectations for business conditions, a survey showed Wednesday.

The Westpac China Consumer Sentiment Indicator rose to 114.9 this month, up from 113.7 in December and the highest level since September, with the survey suggesting that the sharp fall in share prices had no material impact on overall consumer confidence.

Three of the five components that make up the index rose, including expectations for business conditions in five years' time and expectations for personal finances. Survey respondents - consumers across 30 Chinese cities ranging from tier 1 to tier 3 - were more pessimistic about business conditions in one year's time.

"The survey again highlights that, for China's consumers, equity and broader financial market swings are less important for their direct impact on personal finances than the implied message about prospects for the economy," Westpac senior economist Matthew Hassan said.

"The first read for 2016 shows a stable but subdued consumer mood, with slightly more positive attitudes towards housing and durable purchases."

China's stocks have had a wobbly start to 2016, with the Shanghai Composite benchmark tumbling nearly 24 percent so far this year.

Signs of sogginess in the industrial sector, for long the bedrock of China's economy, have hurt sentiment and official data released on Wednesday showed renewed weakness.

Chinese industrial firms' profits tumbled 4.7 from a year earlier in December, marking the seventh straight monthly drop and the longest losing streak since 2011.

In contrast, expectations for house prices rose, according to the survey respondents. An increasing percentage of respondents reported that real estate was the wisest place to keep their savings and that their primary motivation for saving was to make a housing purchase.

Most measures of housing sentiment in the survey are recovering to the levels observed prior to the sharp deterioration in conditions that began in mid-2014, Westpac MNI said.

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