Shanghai's consumers and investors are increasingly confident about the city's economy, buoyed by authorities focusing on development and cutting taxes and fees, a survey released on Monday showed.
The latest Shanghai University of Finance and Economics quarterly Consumer Confidence in Shanghai index grew 4.8 points from the fourth quarter of 2018 to 124.5 points in the January-March period this year. That was up 6.3 points from a year earlier.
The Index of Investor Confidence bounced back strongly, reversing five quarters of falls. It grew 11.89 points from the fourth quarter to 113.12 points for Q1 this year.
But it remained flat on a yearly basis. For both indexes, a reading above 100 shows optimism; below, pessimism.
The increasing consumer confidence in Shanghai’s economy was attributed to Shanghai's Two Sessions held in January 2019 — the second meeting of the 13th Chinese People’s Political Consultative Conference Shanghai Committee and the second session of the 15th Shanghai People’s Congress — during which the city's authorities focused on promoting the steady development of the economy, said Xu Guoxiang, director of the university’s Applied Statistics Research Center.
The government also began cutting taxes and fees from the start of this year, reducing the burden on companies and putting more money into consumers' pockets, boosting consumer expectations on income and higher purchase intentions, Xu said.
The rally in the capital market also helped boost consumer confidence in the first quarter.
The sub-index of purchase intentions jumped sharply by 11.2 points from the previous quarter and 7.8 points from the same period in 2018 to 90.5 points.
The component index measuring intentions to buy homes soared to 74.8 points, 16.4 points higher than the fourth quarter and posting a year-on-year rise of 13.6 points. The intention to buy cars also posted a sharp rise to 88.2 points from 76.6 points in the previous quarter and was up 6.1 points from a year earlier.
The investor index was helped by the easing of trade tensions between China and the US and the plan to increase the weighting of China A-shares in the MSCI index this year, which led to strong gains in China's stock markets, Xu said.
The MSCI's plan to quadruple the weighting of Chinese mainland shares in its global benchmarks later this year could attract more than US$80 billion of new foreign investment, analysts say.