February 21, 2019

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Worries about Chinese consumers spending less are overblown: analysts

Worries about Chinese consumers spending less are overblown: analysts
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But not everyone is optimistic about consumer spending. Economists at Japanese financial firm Nomura cited high household debt and growing unemployment for its view that even stimulus in the form of individual income tax cuts won’t help.

“We see no signs of a sustainable rebound in the near term and maintain our bearish outlook on consumption through 2019,” they said in a report on Jan. 21.

Investors, however, say it’s only natural that China will go through bumps amid its economic transformation, but no one should lose sight of the bigger picture.

“More than 60 percent of China’s GDP is now basically value-added services and consumption,” according to Gavin Parry, managing director of Hong Kong-based investment services firm Parry Global Group.

“So it’s moving very much towards the American model,” Parry told CNBC.



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