China's consumer sentiment fall near 2020 lows before lifted Covid curbs

Chinese consumers last month were almost as negative about their current and future financial conditions as they were in early 2020 as the pandemic was breaking out

Chinese consumer sentiment fell in November back toward lows reached in early 2020, according to a survey that highlighted the economic pressure Beijing faces as it rolls back its most severe Covid Zero curbs. 
 

Consumers last month were almost as negative about their current and future financial conditions as they were in early 2020 as the pandemic was breaking out, according to the survey from US firm Morning Consult.

The sentiment index had been trending downward this year as the country grappled with Covid outbreaks and a property market slump. It ticked upward slightly in October before falling again in November as coronavirus cases surged, spurring lockdowns in many places.

Chinese people’s threat perception of Covid-19 also rose considerably this year, according to Morning Consult. The share of people describing Covid-19 as a major threat to their country rose to nearly 70% in November from 51.7% in January.

The data underscores how much stress the economy faced as policymakers in Beijing decided to start relaxing Covid Zero measures.

The consumer sentiment poll had been improving from late 2020 through 2021, when Covid Zero succeeded in keeping coronavirus cases low without imposing severe restrictions on most people. 

But the policy came under increasing strain this year as the more infectious omicron variant became harder to stamp out even with tougher restrictions, which have faced rising resistance from the Chinese public.

The considerable fall in sentiment this year showed that “lockdowns and a slumping property market have rattled consumer confidence,” said Jesse Wheeler, an analyst at Morning Consult. 

“An end to Covid Zero policies will ultimately spur growth, but over the near term will present serious risks to the Chinese and global economies,” he added.

Morning Consult asks roughly 1,000 Chinese adults each month to rate their willingness to make large purchases, and their assessment of their personal financial and the country’s general economic situation. A score above 100 represents more positive responses, and below 100 more negative responses.