德意志银行-中国-宏观经济-中国消费井喷？-20170825-Sepcial Report：China’s consumption boom？-DeutscheBank.pdfVIP

Deutsche Bank Research Asia Economics Date China Sepcial Report 25 August 2017 Chinas consumption boom? Consumer confidence in China rose to a ten-year high. Imports and short-term Zhiwei Zhang, PhD consumer loans soared. Yet retail sales are stable rather than booming. We Chief Economist discuss in this note: (1) how to explain these seemingly inconsistent signals; (2) +852-2203 8308 how long this consumption momentum can be sustained and (3) what it means for growth in China and the world. Consumption for imports and luxury goods booming Consumer confidence has risen to the highest level since August 2007 (Figure Figure 1: A consumption boom 1). Our banking team recently highlighted Chinas consumer debt boom. Chinas imports (excluding processing trade) increased by USD 120 billion in H1 compared to USD 80 billion in the US (Figure 2). But retail sales growth has been stable in China. Some luxury and discretionary goods are doing well, such as high-end liquor and SUVs, but the consumption boom seems to be selective rather than broad based. Source: Deutsche Bank, WIND Wealth effect from property bu le is the driver We argue the consumption momentum is driven by the wealth effect of a property bu le. This wealth effect was not significant on the macro level before 2016 Figure 2: Imports growth, China vs. because property prices were high only in tier 1 cities back then (8.9% of urban the US population). As the bu le spread into tier 2 and satellite tier 3 cities (63.4% of urban populat