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Shanghai consumers becomes less confident in Q2

Consumer confidence in Shanghai fell to a two-year low in the second quarter hurt by worries for global and domestic economic recovery, a survey showed today.

The Index of Consumer Confidence in Shanghai, a quarterly gauge compiled by Shanghai University of Finance and Economics, dropped 8.7 points from the first quarter to 109 points, the lowest since the second quarter 2014.

Readings above 100 points indicate optimistic economic outlook.

Xu Guoxiang, director of the university’s Applied Statistics Research Center, said the combined impacts from weaker than expected domestic economic indicators, uncertainties along with Britain’s decision to leave the European Union, and the weak stock and yuan exchange rate have weighed on consumers’ expectations for economic recovery and willingness to spend money.

Xu said Shanghai could encourage private investment, increase financial support for the private sector, and drive upgrade of the services sector to improve consumer confidence.

But a separate Index of Investor Confidence by SUFE picked up 6.21 points from the first quarter and return to a positive reading of 104.14 points.

Investment confidence of institutional investors rose significantly while that of individual investors remains in a pessimist zone, the report showed.

The National Bureau of Statistics is due to release China’s second quarter GDP growth this week, as market watchers generally expect the reading to be flat or slightly lower than the first quarter growth of 6.7 percent.

Shanghai’s local data showed the city’s gross domestic product grew 6.7 percent year on year in the first three months, 0.1 percentage points faster than the expansion in the same period last year. The city’s services output rose 11.5 percent to 439.76 billion yuan, contributing to over 70 percent of the local GDP for the first time.

The city government made no mention of a GDP target in its January work report, but gave its priorities as boosting innovation, keeping unemployment below 4.5 percent, and investing 3 percent of GDP in green projects.


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