Rising inflationary pressures caused a decline in confidence among Chinese consumers in January, traditionally a shopping season in preparation for the Chinese Lunar New Year, according to the latest consumer index issued Wednesday.
The Bankcard Consumer Confidence Index (BCCI), which was compiled by Xinhua News Agency and China UnionPay, dropped to 85.53 in January this year, down 1.28 points from the same period last year and down 0.39 points from the December level.
The January BCCI report attributed the decline in consumer confidence to continued price increases, particularly among basic consumer goods, which was driven by unbalanced supply and demand.
The freezing weather in the southern China region had also disrupted the production and transportation of basic goods, including vegetables and meat, said the report. Meanwhile, demand for the goods sharply increased as Chinese revelers stored food ahead of the Spring Festival that started on February 3.
However, the report noted that, despite the price pressure, the general consumer sentiment is not deeply affected. A decline in the BCCI is merely a reflection of price changes instead of shrinking demand.
The report added that as government inflation control measures gradually take effect, the price trend will play a less important role in Chinese consumer confidence in the future.
Latest figures from China UnionPay, the national bankcard association, showed that inter-bank bankcard transactions in the country jumped 31 percent year on year to 74.7 billion yuan (11.34 billion U.S. dollars) from Feb. 2 to 8. (1 U.S. dollar = 6.5849 yuan)
Xinhua News Agency and China UnionPay jointly began compiling the BCCI index in April 2009 based on bankcard transaction data and analysis of structural changes in urban consumption.