In the recent National People's Congress and National Committee of the Chinese People Political Consultative Conference held in China, many hot issues were raised and discussed. How could China achieve the target of 8% GDP growth in 2009? How could China resolve the growing unemployment issue? What would be the future of the real estate market? How would the RMB4 trillion 'economic stimulus plan' be implemented? All these discussions centered around one issue - how China could breakthrough the current global economic crisis.
A global economic confidence survey released in March 2009 by N-Dynamic Market Research & Consultancy Ltd in China revealed that 45% of Chinese respondents believed that the Chinese economy was getting stronger while 23% felt weaker, compared with the global figures of 8% for the former and 71% for the latter. In Japan and the UK, 82% of respondents felt that their country's economy was getting weaker, and in the USA, the figure was 72%. Apparently, Chinese respondents were the most confident in their own country among respondents in all 19 countries researched.
According to N-Dynamic's survey result, Chinese people have not felt the serious impact of the worldwide economic crisis. Only 48% of Chinese respondents felt that China has been affected by the crisis, compared with 86% globally. What's more, 98% of respondents in Japan, South Korea and USA thought that their countries' economies were suffering from the crisis.
The survey that was completed in February 2009 involved 19 countries and 16,000 respondents. All the findings of the survey are covered by The Global Economic Confidence Report launched at the IRISIRIS (International Research InstituteS) Conference (March, 25th 2009) in Hague, Netherlands. N-Dynamic Market Research & Consultancy Ltd., the only representative in China in the IRISnetwork, was responsible for the survey and analysis in mainland China. The survey unveiled the attitude of Chinese people in the current economic crisis and changes in their consumption behavior.
Chinese feel confident and optimistic on personal financial situation
The result of the survey showed that over half of the Chinese respondents (54%) did not see any changes in personal financial situation in the next six months. Only 15% of them felt that it would become worse. However, in South Korea, Mexico, Japan, and Thailand, over half of the respondents felt pessimistic about future financial situation. 41% of American respondents also believed that it would get worse in the future. In the UK, the figure was 31%.
29% of the Chinese respondents considered the current economic situation the worst since they were born, but the worldwide figure reaches 59%, while the figure in America was 89%. In South Korea, Mexico and Thailand, over 70% of the respondents had the same feeling.
Economic crisis: caused by America's free market economy
34% of Chinese respondents thought that America should mainly bear the responsibility for the current global economic crisis. Free market economy advocated by the Americans was to be blamed for this crisis. In China, 42% of the respondents claimed that the free market economy did not work well without enough government intervention. And in the world, the percentage reached 48%. It was interesting that among the 19 countries, only in America there were over half of the respondents believed that free market still worked.
China always advocates a planned economy. The citizens are also satisfied with the performance of the government in this crisis. 44% of the respondents felt that the Chinese government has taken enough measures to address challenges to China's economy. 39% of the respondents thought that the influence of the crisis would end within half to two years. Only 13% of Chinese respondents thought that the crisis would last over two years, in the world this proportion was 36%, in Ireland and Mexico the percentage was over 50%, and in America the percentage was 40%.
Employment: Hidden danger exists
Though 40% of the Chinese respondents did not worry that they or their family members might lose their jobs in the next 6 months, 30% of them still expressed their concern, especially for people aged between 36 and 45. 11% of the respondents noted that someone in their family has already lost a job, which closely matched with the unemployment rate estimated by some experts in China.
Currently, migrant workers and college graduates encounter the most severe employment problem. Some economists believe that unemployment problem will potentially threaten China's economy. Prime Minister Wen Jiabao said: "Employment is not only about one's living but also one's dignity."
Chinese consumers' financial situation: Personal consumption is being cut back; domestic demand needs stimulation
50% of the Chinese respondents adopted a wait-and-see attitude on consumption while 20% felt "it is a bad time to buy now". Globally, the proportion of respondents who thought "it is a bad time to buy now" was 48%. South Korea had the highest percentage of 83%, and the percentages of Mexico, Russia and Greece were all over 60%, and in Japan, America, Canada and France, over 50%. The above implies that consumption is going down globally but Chinese consumers have the strongest confidence in consumption.
The personal consumption of Chinese respondents has been cut down, especially in daily necessities. 42% of Chinese respondents claimed that they took public transportation more often, dinning out less and spending less on clothing. Furthermore, 31% of the respondents would delay purchasing a house, and this percentage was 8% higher than that of the global average. Therefore, 2009 is a tough year for automotive and real estate industries. If the economic crisis gets worse, Chinese respondents will cut back on vacation and luxurious products.
We have also noted that the savings of Chinese people in 2008 is RMB20 trillion, which is nearly RMB4 trillion more than that in 2007. It can be speculated that with the RMB4 trillion `Economic stimulus package' of the Chinese government, domestic demand of Chinese consumers will be gradually stimulated with renewed confidence, and therefore drive the Chinese economy to recover.
With economic globalization, no country can stay away from the economic crisis. But China is going to recover with huge domestic demand, government economic policy and the confidence of the Chinese people.
The Managing Director of N-Dynamic, Priscilla Sze, said that business enterprises all over the world would eye on Chinese consumers. Some enterprises might enter into the Chinese market for the first time to cater to the needs of Chinese consumers. Export-oriented companies like apparel companies might switch to targeting the domestic market by building their own brands. It would result in more choices for the consumers at the retail level. More and more enterprises will focus on customer relationship management to improve customer loyalty thereby generating revenue and profitable growth. Facing the dynamic and sophisticated Chinese consumers, business enterprises will be required to launch increasingly innovative and diversified marketing strategies and programs.
About The Global Economic Confidence Survey (mainland China)
The Global Economic Confidence Survey (mainland China) was conducted via Computer Aided Telephone Interview in February, 2009 among 1,000 people aged between 18 and 60, in 57 cities across 30 provinces in China.
The entire survey was conducted early this year in 19 countries among 16,000 respondents. All the findings of the survey were published in The Global Economic Confidence Report launched at the IRIS (International Research InstituteS) Conference in March in Hague, the Netherlands. N-Dynamic Market Research & Consultancy Ltd., the only representative in China in the IRIS network, was responsible for conducting the survey and analysis in mainland China.
IRIS (International Research InstituteS) is a network composed of independent market research agencies across 30 countries around the world. It aims to provide high-quality and genuinely local expertise and insight to bear on researching global consumer issues. N-Dynamic is its only member in mainland China. Based in Shanghai with a branch office in Beijing, N-Dynamic has established a network of 35 reliable local partners in China to conduct nationwide projects.
For more information about IRIS, please visit www.IRISnetwork.org
For more information on N-Dynamic and this study, please contact us.