- Chinese consumer confidence currently sits at the highest level in 20 years.
- It has rebounded sharply since early 2016, mirroring a recovery in the broader Chinese economy.
- Per capita real disposable income surged 6.6% in the March quarter compared to the same period in 2017.
If you’re looking for an alternate indicator as to how the Chinese economy is faring in early 2018, this chart from Commsec speaks volumes.
Using data from China’s National Bureau of Statistics (NBS), it shows consumer confidence currently sitting near the highest level in 20 years.
Like other sentiment indicators released around the world, the figure is based off a net balance of responses with a reading above 100 indicating that optimists outnumber pessimists.
There’s a lot more optimists than pessimists at present.
The sharp and sudden spike in confidence coincides with a rebound in the Chinese economy following a noticeable slowdown in late 2015 and early 2016, something that contributed to a noticeable lift in financial market volatility at the time.
Like many in financial markets, the recovery has clearly surprised more than a few Chinese over the past couple of years, helping to boost sentiment levels.
And with the economy strengthening, that’s helped to boost labour market conditions and worker incomes, another factor that’s likely contributed to the sharp improvement in the mood of consumers.
According to the NBS, unemployment in urban areas across China currently sits at 5.1%, down marginally on the same period a year earlier.
The NBS said that average per capita disposable income grew 8.8% in the March quarter compared to a year earlier. With inflation growing at a far slower pace over the same period, that left average per capita disposable income up 6.6% in real terms.
It’s little wonder confidence levels are skyrocketing.
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