Households less confident in China economy: BoCom

By Wang Yanlin | August 5, 2013, Monday |

Online Edition

Chinese households were less confident about the country's economy due to slower growth in both business activity and people's income, a survey showed today.

The China Wealth Index, compiled by the Bank of Communications to gauge sentiment among Chinese households, stood at 120 in July, down from 128 in May and the lowest level so far this year. A reading above 100 still means optimism.

The component indices showed that people's confidence in the economy lost 12 points to 118, and willingness to invest retreated 4 points to 110.

"The sharp decrease of the index is a reflection of China's weakening recovery," said Lian Ping, BoCom's chief economist. "The country has seen losing steam in the growth of manufacturing and trade, while it has to deepen the efforts on economic restructuring that has become more difficult to continue."

China's gross domestic product expanded 7.5 percent from a year earlier in the second quarter, further deteriorating from the pace of 7.7 percent in the first three months, according to the National Bureau of Statistics.

While the economic growth slowed, people's proceeds grew at an even weaker pace. Disposable income of China's urban residents rose 6.5 percent year on year in the first six months, less than 9.7 percent a year earlier and behind the economic growth of 7.6 percent in the first half.

But Lian said survey respondents were not so pessimistic about the future as the government has released intensive policies to bolster the economy in recent days. The efforts included the tax reduction for small and medium-sized companies as well as more infrastructure construction investment.

"We expect there will be more modest supportive measures in the pipeline to support a growth rate of around 7.5 percent this year," Lian said.

He added that China's property market may remain stable in the second half because the government is unlikely to introduce more restrictive policies.

The bank interviewed 1,920 households in major cities in the latest survey for the index, released every two months.

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Households less confident in China economy: BoCom

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