West China sees record high willingness to spend

Chinese Consumer Confidence indexed at 106 in the third quarter of 2015, one point lower than the previous quarter, but the country's western region achieved a two-year record high, a Nielsen study showed on Wednesday.

The three key components of the consumer confidence index remained either flat or saw a slight drop, according to Nielsen's latest research. The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicates degrees of optimism and pessimism, respectively.

Expectations for employment remains stable at 66 percent, while personal finance saw a decline of one percentage point to 64 percent. Notably, while consumer willingness to spend is down one percentage point to 48 percent, this still represents its second-highest level over the past two years.

"Income levels continue to rise and information about goods and services are more accessible than ever before. So what we're seeing are confident, middle class consumers who are looking to make purchases that improve their quality of life," said Kiki Fan, Managing Director of Nielsen China. "At the same time, evolving e-Commerce and logistics capabilities are helping to unleash demand and drive growth."

With respect to the confidence index within China's city tiers, Tier 1 cities like Beijing and Shanghai continue to show the highest index at 110, despite a two point decline. Tier 3 and Tier 4 cities (mainly counties) both indexed at 107, which represented a two point drop for Tier 3 but a stable index for Tier 4. Finally, Tier 2 and Rural consumers both had an index of 106.

China's Western region saw its consumer confidence index increase one point to 97 this quarter, achieving a two-year record high willingness to spend for the second quarter in a row. It appears to have experienced some positive development from China's "One Belt, One Road" policy, which aims to increase demand by improving export capabilities for manufacturing sectors.