China’s consumer confidence nears all-time low, calls for ‘bolder’ measures

Consumer confidence in China is approaching a historic low as short-term supportive measures rolled out this year have had a limited impact amid falling asset prices, moderate wage growth and capital outflows, investment bank Nomura said on Wednesday.

The consumer confidence index for the world’s second-largest economy hit 86 in July, according to Nomura, down from 86.2 in June, falling to just above the all-time low of 85.5 in November 2022 during the coronavirus pandemic.

“To truly revive consumer confidence, we believe Beijing needs to implement bolder and more effective stimulus measures to address the real problems in the property sector,” said Nomura economists led by Lu Ting.

The metric, which measures consumer confidence on a scale of zero to 200, with 100 indicating a neutral stance, had reached a record high of 127 in February 2021. It is based on a monthly survey of 6,480 individuals from 15 provinces conducted by the National Bureau of Statistics.

A “sustained weakness” in consumption could be attributed to falling property and stock prices, plus “tepid” wage growth and “capital flight amid geopolitical tensions”, they added.