Consumer confidence in China – additional information
The consumer confidence index (CCI), also called Index of Consumer Sentiment (ICS) is a commonly used indicator to measure the degree of economic optimism among consumers. Based on information about saving and spending activities of consumers, changes in business climate and future spending behavior are being projected. The CCI plays an important role for investors, retailers, and manufacturers in their decision-making processes. However, measurement of consumer confidence varies strongly from country to country.
As shown by the graph at hand, confidence among Chinese consumers has picked up since the beginning of 2014. In February 2015, the CCI hit a record value of 109.8 index points. Owing to a relative stability in GDP growth, a low unemployment rate, and a steady development of disposable household income, Chinese consumers had gained more confidence in the state of the national economy. Those factors also contribute to the consumers’ spending power, which was reflected by a larger share of consumption in China’s GDP.
As consumers need time to react to economic changes, the CCI tends to lag behind other indicators. Opposed to the CCI, both the consumer price index (CPI) and producer price index (PPI) had been comparably low in 2014. The former indicates rising risks of deflation as the world economy cools down. The latter suggests a lack of growth and demand in the manufacturing sector.