Economy

China's May consumer confidence weakens

(Xinhua)
Updated: 2010-06-09 16:01

BEIJING: Chinese spent less in May amid volatile stock market fluctuations in the wake of the European sovereign debt crisis, according to the latest reading of an index that gauges consumer confidence published Wednesday.

The Bankcard Consumer Confidence Index (BCCI), compiled by Xinhua News Agency and national bank card association China UnionPay, slid to 86.39 in May, down 0.41 points from April.

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Compared with the same period last year, the May BCCI figure was 0.89 points higher. The index hit a record high of 86.89 in March.

The reading in May indicated Chinese bank card spending was affected by the drop in domestic and overseas stock markets during the period, said the BCCI report.

The benchmark Shanghai Composite Index tumbled 9.7 percent in May after the Chinese government introduced a series of tightening measures to dampen the booming property sector.

A sense of uncertainty about the global economy had spread to China as well, due to the debt crisis in Greece and other European countries, said the report.

Bank card spending had dropped on non-essentials items, the report said, without giving specific details.

The report said the adjustment of the capital market would only have a short-term impact on consumer confidence in China because the economic fundamentals were sound.

"Domestic demand is rising, industrial output is on track of steady growth while employment in the manufacturing industry is also improving," it said, adding: "those are very important factors to stabilize consumer confidence."

Xinhua News Agency and China UnionPay jointly started compiling the BCCI index in April 2009 based on bank card transaction data and analysis of structural changes in urban consumption.