China's wealthy families worry over economy's prospects

China's wealthy families are slightly less optimistic over the prospects for the Chinese economy as economic growth slowed in the year's second quarter, the Bank of Communications said in a report today.

The bimonthly Climate Index of China's Wealth came in flat from two months ago at 141 points in July, according to BoCom.

A reading above 100 indicates growth in wealth, while that below 100 depicts deterioration.

The economic climate sub-index dipped 1 percentage point to 140, that for income growth also slipped 1 percentage point to 155, while the investment intention sub-index added 1 percentage point to 126 from May.

The reading of the wealth climate index indicated that well-off families are cautious about the future of the Chinese economy, BoCom said.

China's economy grew at a slower pace in the second quarter of this year at 6.7 percent year on year, which was 0.1 percentage point below the first quarter's figure. The year-on-year growth in value-added industrial output was 0.2 percentage points slower in the first six months of 2018 compared with the reading in the January-May period. The June figure fell by 0.8 percentage points from May.

The sub-index for economic climate slipped as the indicator of investment climate dipped one point and that of employment situation was flat. The report attributed the decline to cooler factory and service activities amid severe weather, weaker external demand and slower price increase.

The fall in the sub-index for income growth was led by the wildly fluctuating Shanghai Composite Index and slumping precious metal prices and oil prices during the period from July 6-19, BoCom said.

However, the investment intention sub-index rose because the solid intention to invest in real estate offset the lower investment intention for current assets.

By regions, the southern areas of the country posted the biggest rise in the Climate Index of China's Wealth and the sub-index for economic climate. BoCom ascribed the growth to the Cooperation Framework Agreement signed jointly by the Ministry of Commerce and the Guangdong provincial government in July to strongly support the province to open up further.

The survey covered 1,827 well-off families in Beijing, Shanghai, Shenzhen and Guangzhou, and 22 other major cities. Different annual after-tax incomes were set to  define "well-off families", with Beijing and Shanghai exceeding 240,000 yuan (US$34,735), over 180,000 yuan in Guangzhou, Shenzhen, Nanjing and Tianjin, and above 170,000 yuan in Hangzhou.