China consumption supports economic growth, but slowdown inevitable - UBS
Chinese consumers represent a strong tailwind for continued economic growth, but robust consumption will not prevent a slowdown in the economy, UBS said.
UBS said in a note to clients that urban households are already spending at a fast pace, and there may not be much room for an acceleration.
""A hard look at the numbers shows that, contrary to common belief, the Chinese consumer has not been underperforming or oversaving,"" said Jonathan Anderson, head of Asia-Pacific economics at UBS in Hong Kong.
""Rural incomes and expenditure may have slowed over the past few years, but once we account for durables such as autos and homes, we find that urban households are spending at an extremely rapid clip without much room for further upside.
""The strength of the consumption story is precisely why we are not looking for a harder landing in the economy. However, this does not mean China can avoid a landing at all.""
Anderson said national accounts data show real consumption growth slowing to six pct over the last four years, lower than the rate of household income growth, which implies that consumers have stopped buying and are saving more instead.
But when these figures are adjusted to include spending on durables such as houses and cars, consumption is actually ""speeding along with the rest of the economy"" and is contributing over five percentage points to overall real gross domestic product growth compared with only three percentage points in the unadjusted data, Anderson said.
Anderson also ruled out a rural-driven consumption boom going forward, saying that higher rural incomes will increase the cost of food for urban dwellers.
""The bottom line is that the Chinese consumer still represents the strongest tailwind supporting growth in the economy but this is no reason to bet against a trend slowdown going forward,"" Anderson said
瑞银: 中国经济降温无可避免 / 惟消费可提供支撑
瑞士银行发表报告预料, 消费扩张将支撑中国经济持续增长, 但经济降温已无可避免。
报告称, 过去数年中, 中国农村收入和支出增速或有所放慢; 倘将汽车和房屋等耐用消费品计算在内, 城市消费增速可谓惊人, 进一步增长的空间十分有限。
但该行指出, 中国消费依然强劲, 预料不会出现经济硬着陆, 但这并不意味着中国能避免经济降温。
