Shanghai confidence slips, but remains positive

Shanghai’s consumer and investor confidence both retreated in the third quarter although they remain in positive territory, the latest Shanghai University of Finance and Economics survey shows.

The university’s quarterly Consumer Confidence in Shanghai index, released Monday, fell 2.7 points from the second quarter to 117.8 points in the July-September period. And that was down 3.6 points from a year earlier.

A reading above 100 indicates optimism.

The lower consumer confidence in Shanghai’s economy was attributed to the growing challenges and uncertainties the Chinese economy is facing as well as the slumps in the stock markets and real estate market, said Xu Guoxiang, director of the university’s Applied Statistics Research Center, and deputy directors Cui Chang and Wu Chunjie.

International factors are also weighing on consumer confidence.

“The ongoing trade tensions between China and the United States, and the Federal Reserve’s interest rate hike have created some pressure on exchange rates, domestic capital markets and Chinese economy, which has affected consumer confidence to some extent,” Xu said.

Despite the decline in the index, consumer confidence still remained optimistic, as Shanghai’s overall economic indicators are stable.

And the domestic economy is still growing at a relatively robust pace, although growth slowed to 6.5 percent in the third quarter.

The component index measuring plans to buy homes dropped despite lower housing prices. The index of consumer intention to buy cars shed 2 points from the second — 4.9 points from the same period a year earlier.

The Index of Investor Confidence also dropped 5.43 points from the second quarter to 101.44 points in the period from July to September and was down sharply by 15.51 points on a year-on-year basis.

But the index still stayed in positive territory, indicating that the investors still have a positive view of the investment environment in Shanghai.