200 People In China Reveal What's Really Going On In The Economy

Dancers of China's Gansu province Opera Ensemble perform

Photo: AP Images

Analysts have yo-yo-ed between a Chinese hard-landing and soft-landing. They’ve warned of the property bubble, inflation and the Chinese stock market.But what does the average Chinese person make of the economy, infrastructure and food safety?

In the latest of their monthly “Chinese Whispers” report, Credit Suisse analysts spoke with 200 long-term residents from 61 cities, across various age groups and income brackets, to determine how they felt about economic growth, inflation, investment and spending.

Most people think inflation is getting worse

  • 42% expect prices to rise in November, down from 58% the previous month
  • 12% expect CPI to decrease in November, from 7% the previous month
  • 46% expect inflation to stay flat, compared with 35% the previous month

Source: Credit Suisse

Residents finally expect property prices to fall

  • 53% of respondents expect property prices to fall, against 18% the previous month
  • 36% expect property prices to stay flat, compared with 53% the previous month
  • 11% expect prices to increase, from 29% the previous month

Source: Credit Suisse

They still want to buy a house if prices get cheaper

  • A 20% - 30% property price correction would attract the most potential buyers.
  • 51% of respondents said they would consider buying additional property if prices were down over 20%. But 31% said they would not buy additional property irrespective of a correction in property prices.
  • Lower-income people from Tier 3 cities are most likely to invest in property.

Source: Credit Suisse

Shoppers are starting to tighten their purse strings

  • 45% of respondents said they will increase spending in November, down from 56% the previous month.
  • 15% said they would cut spending in November, down from 12% the previous month. The decline is attributed in part to the Golden week of holidays in October, when spending increases.

Source: Credit Suisse

China's high-speed rail is losing popularity

  • 38% said they will increase leisure and travel expenses over the next six months, now that the National Day holiday is over.
  • 42% of respondents had previously said they would choose China's high-speed rail (HSR) for leisure travels. But after the fatal collision of two high-speed trains in July, 64% have said they would choose airlines over high speed rail (HSR).

Source: Credit Suisse

LOTS of people are involved in informal lending

  • 48% of respondent are involved in informal lending.
  • The highest per cent of people involved in informal lending are from tier 3 cities like Yizheng because they lack accessibility to formal financial management tools.

Source: Credit Suisse

Gold is popular with lower-income groups

  • 32% of respondents said the would invest in gold, compared with 19% in stocks, and 13% in property.
  • 27% of people in the higher-income group are interested in the stock market, compared with 16% each in the other two income-brackets.
  • 47% of people in lower-income group would invest in gold, compared with 24% in the higher-income group.

Source: Credit Suisse

The Chinese don't have high expectations for their investments

  • 43% of those surveyed expect 5% - 10% returns from their investments, and only 5% expect over 20% in returns.
  • Most were satisfied with a return a little higher than the one-year bank interest rate.

Source: Credit Suisse

Most respondents aren't too impressed with food safety

  • Only 12% of those surveyed food safety is improving, but the per cent of those who think its getting worse has fallen to 22%, from 26% the previous month.
  • An overwhelming 66% however think the situation is the same despite stricter policies.
  • Those who thought food safety was worsening were primarily younger, between the ages of 18 years - 29 years, and from tier 1 and tier 2 cities.

Source: Credit Suisse

Now here's everything you need to know about China's population...

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