Illustration: Liu Xidan/GT
In a positive development for the Chinese economy, a recent survey conducted by Deutsche Bank has revealed an improvement in consumer sentiment among Chinese households. This increase in confidence comes at a crucial time as China has prioritized expanding domestic demand to achieve the GDP growth target of about 5 percent for 2025, despite facing multiple challenges.
Some 54 percent of respondents polled the current quarter said they feel financially better off than a year earlier, up from 44 percent on average in 2024, according to a report released by the German bank on Tuesday, Bloomberg reported. The upbeat findings suggest China is increasingly reaping the benefits of the drive to boost household confidence and consumption, the report said.
This trend is consistent with China's domestic data. The consumer confidence index for February was 0.9 percentage points higher than in January, rising for the third consecutive month, according to data released by the National Bureau of Statistics (NBS).
A series of optimistic figures indicates that recent actions to boost household confidence and consumption are yielding increasingly positive results. Policies that encourage consumers to spend and feel confident in spending continue to promote growth.
China's vast market potential is becoming increasingly apparent. In the first two months, retail sales reached 8.37 trillion yuan ($1.16 trillion), up by 4 percent year-on-year, NBS data showed. This growth is a critical indicator of the country's consumption strength and reflects the positive impact of pro-growth policies implemented by the government.
The retail landscape in China is also evolving, with a notable increase in online retail sales, which reached 2.28 trillion yuan in the first two months of this year, up by 7.3 percent year-on-year. Trade-in programs for consumer goods have further stimulated demand, with significant growth observed in categories such as communication equipment, cultural and office supplies, and household appliances. This trend underscores the increasing new growth points of the Chinese consumer market.
China's commitment to expanding domestic demand is evident in its recent moves. A comprehensive plan was issued by the General Office of the Communist Party of China Central Committee and the State Council on Sunday, focusing on stimulating domestic demand and enhancing consumer spending power through increased earnings and reduced financial burdens.
Despite a growing number of positive indicators suggesting that Chinese consumption is rebounding with the boost of policy support, Western media outlets remain skeptical about the sustainability of this recovery, pointing to challenges in China's real estate sector as a concern. Bloomberg noted that household consumption expectations in China are still being held back by issues in the real estate market, suggesting that a genuine shift in consumer sentiment will likely depend on the performance of housing prices.
While it is true that the economy has been experiencing structural adjustments, particularly within the property sector, a concentrated effort to revitalize real estate can restore market confidence. Economists noted that the recovery of the real estate market that began in the fourth quarter of 2024 marked a trend. In the first two months of this year, both housing and land transaction volumes recovered further.
In terms of the market potential and resilience, NBS spokesperson Fu Linghui said at a press conference on Monday said that China's market offers immense growth potential, with a population of more than 1.4 billion and per capita GDP exceeding $13,000. The expansion of new types of consumption such as spending in the green and digital sectors, as well as services consumption in areas such as eldercare and childcare, will become a significant driving force for consumption growth. The expansion of these new consumption types is anticipated to further stimulate consumer spending.
The Deutsche Bank survey also showed that the proportion of Chinese consumers anticipating an income increase in 2025 rose for the second straight quarter to 60 percent. The finding indicates positive prospects for China's consumption, driven by government initiatives aimed at boosting household confidence and consumption. As the country navigates its economic challenges, the positive outlook for consumer spending offers a promising boost to sustained growth.
The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn
