BEIJING: Some three-quarters of Chinese consumers will increase or maintain their spending levels next year in spite of the economic downturn, the Boston Consulting Group has found.
It has been argued that Chinese shoppers tend to save a higher percentage of their income than is often the case in many Western economies, with further recent insights suggesting some may also start to trade down in certain categories.
However, BCG has found that almost twice as many Chinese plan to either keep their spending levels constant or heighten their outlay next year when compared with their counterparts in the US and the European Union.
Furthermore, only 23% predict their financial situation will get worse this year, a figure rising to 32% in the US, 49% in Europe, and 57% in Japan.
Carol Liao, of BCG's Greater China Office, argues one reason spending levels may remain high in the country is that consumers have "greater confidence in the government, rooted in three decades of rising economic growth."
This is enhanced by the fact that the "younger generation" in China doesn't have "bad memories" of economic upheaval, placing them in stark contrast with their contemporaries in Brazil, many more of whom are "trading down."
China's premier, Wen Jiabao, has also recently argued that consumer confidence is "more important than gold or money," and while the nation's economic growth rate fell to 6.1% in Q1, retail sales rose by 15.9% over the same period.
However, Ben Simpfendorfer, an economist at the Royal Bank of Scotland, said this was partly due to retailers cutting prices, and as such, "any recovering consumer confidence is still fragile."
Data sourced from Wall Street Journal; additional content by WARC staff