Chinese consumer confidence rebounded by 0.5 point in March despite the negative influence of surging consumer prices and a falling stock market, said a report by Xinhua Finance Ltd and eziData today.
The index was bolstered by information released during the National People's Congress and the National People's Political Consultative Conference, which boosted people's future expectations, the report said.
The China Consumer Confidence Index compiled by the two companies rose to 96.3 points in March from 95.8 points in February. It was the second lowest level in the history of the survey, which started in April last year when the benchmark value was set at 100.
"The negative effect of the snow storms in February started to fade away in March, and people were encouraged by the recent political events," said the report.
But the double pressure of the rising consumer prices and a drastically falling stock market was still dragging the index backward.
China's consumer prices, the main gauge of inflation, climbed to a record high in nearly 12 years of 8.7 percent last month compared with a year earlier.
Analysts attributed the main cause of the inflation surge to snow storms in late January, which led to short supply of various foodstuffs, especially vegetables.
With the battered traffic of supply back to normal, analysts estimated consumer prices will post a slower growth of 8.1 percent this month.
Premier Wen Jiabao said during the National People's Congress that the government was on target to keep inflation under 4.8 percent this year by sticking to a prudent fiscal policy and tight monetary control.
"The stock market fall in the past two months has affected current investment returns and future expectations of investors," the report said. "However, compared to the drastic fall in the stock index, the fall in investor confidence was far from being in proportion, indicating a more stable future outlook among this part of the consumers."
The Shanghai Composite Index has been hovering around 3,600 this week, compared with 4,300 for the same period last month, with people's sentiment continue to turn sour. The survey was conducted through 1,534 telephone interviews this month by Xinhua Finance Ltd, a financial information and media service provider and the local China consumer data provider eziData.
March 26, 2008)