Chinese Consumer Confidence Remains High

Anchor:
Despite the negative impact of the global financial crisis to the Chinese economy, consumer confidence has continued to increase according to a recent survey. Shuang Feng has more.

Reporter:
According to the latest data from the National Bureau of Statistics, the total retail sales of consumer goods in April rose 14.8 percent year on year.

A recent survey by The Nielsen Company shows that despite the negative impact of the global financial crisis, Chinese consumers have remained confident in the economy. Mitch Barns is the president of Nielsen Greater China.

"Globally, we found consumer confidence fell about 7 points from 84 six months ago down to 77. And in China, consumer confidence fell 7 points from 96 down to 89. But the result in China is still well above the global average. And also we saw that the decline in China being much smaller than it was in the world's other major growth economies. So overall, China's result is still fairly good."

Xiao Geng, an associate professor of economics from the University of Hong Kong, says several factors are credited for the growth.

"The global financial crisis definitely affected China's external sectors, such as exports and export related employment. But if (you) look at the domestic economy, especially the infrastructure and the housing, because of the urbanization and also very strong stimulus from the government, the domestic economy in general is quite stable."

Aside from the effective stimulus policy made by the Chinese government, many Chinese consumers have large amount of savings which allowedthem to keep spending amid the economic downturn.

Mitch Barns says there are two particular opportunities for the growth of expenditure.

"First, Chinese consumers have a tremendous appetite for travel, which was revealed in our survey. And I think that any program or stimulus package that encourages consumers to satisfy their desire for travel, particularly travel within China, is a good idea right now. The second opportunity is to drive household penetration of personal computers in China. Right now, only about 22% of all households in China have a personal computer, but we believe that about three times that amount would like to own a computer, which is a tremendous demand. So if at least part of that high ownership demand can be met it would drive up growth and domestic consumption."

Barns also mentions that ownership of computers will give consumers more access to information about other products and services, as well as make them more confident in potential purchases. This will in turn contribute to an increase in domestic consumption.