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China consumer sentiment declines but spending intentions improve: Survey

A vendor prepares steamed stuffed buns at a stall outside a restaurant nearby the Jiuquan Iron & Steel (Group) Co (JISCO) factory complex as the sun rises over the city of Jiayuguan, some 2,000 km (1,250 miles) west of Beijing, on April 22, 2016.
Nicolas AsfouriI | AFP | Getty Images
A vendor prepares steamed stuffed buns at a stall outside a restaurant nearby the Jiuquan Iron & Steel (Group) Co (JISCO) factory complex as the sun rises over the city of Jiayuguan, some 2,000 km (1,250 miles) west of Beijing, on April 22, 2016.

Consumer sentiment in China eased in April after a sharp improvement in the previous month, although the buoyant outlook for spending suggested some stability in the world's second-largest economy, a private survey showed Wednesday.

The Westpac MNI China Consumer Sentiment Indicator fell to 117.8 in April from 118.1 in March, Westpac said in a statement. Separately, official data showed an improvement in China's industrial profits.

The decline was largely due to a fall in expectations of business conditions in a year's time to 119.3 in April from 122.8 in March, the survey showed. Consumers were also less confident about the outlook for their personal finances.

More encouragingly, respondents were more optimistic about their existing personal financial situation, with the Current Personal Finances Indicator climbing to 110.3 in April, a 1.1 percent increase from the previous month and marking the highest reading since May 2014, Westpac said in the statement.

Both the Shopping and Dining Out Expenditure Indicators increased to the highest since July and February 2014 respectively.

"While the headline Westpac MNI China Consumer Sentiment Indicator fell marginally on the month in April, this belies a more robust picture beneath the surface," said Philip Uglow, chief economist at MNI Indicators, which compiles the index.

The Westpac MNI Indicator is based on responses from a minimum of 1,000 individuals aged between 18 and 64 across 30 cities in China.

"Most notably the far more positive gauges on leisure spend and buying conditions across a range of items including cars, should help to underpin retail sales and consumer spending growth," Uglow said.

A translation of the survey findings to actual spending, if realized, would allay concerns over the health of the Chinese economy, which has sputtered in recent years as domestic spending has failed to offset declines in overseas demand for Chinese goods.

Profits earned by Chinese industrial companies rose 11.1 percent in March from a year earlier, Reuters reported.

Industrial profits rose to 561.24 billion yuan ($86.50 billion) in March, the National Bureau of Statistics(NBS) said on its website on Wednesday, according to Reuters.

Survey respondents expressed greater willingness to shop and dine out, suggesting a likely improvement in official retail sales figures for April. Willingness to spend on IT products, phones and other appliances also increased, the survey showed.

The Car Purchase Expectations Indicator increased to 109.1 in April from 103.4 in March, the highest since October 2010.

-Reuters contributed to this article

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