BEIJING - Price satisfaction among Chinese consumers picked up in the first quarter of this year, and expectations of further inflation declined.
That's according to a central bank survey released on Wednesday.
In the last quarter of 2010, figures indicated the lowest level of satisfaction since 1999. However, people's willingness to spend hit the lowest level for 12 years, according to the report. The People's Bank of China's survey covered 20,000 savers in 400 banks across 50 cities.
"The data shows that the monetary measures taken by the government are working and concerns about inflation have decreased. However, the increased hesitation to spend indicates that their satisfaction about prices is still lower than usual," said Liu Yuanchun, deputy head of the School of Economics of Renmin University of China.
The satisfaction index among Chinese households increased from 13.8 percent at the end of 2010 to 17.3 percent in the first three months of this year, according to the survey.
Approximately 67 percent of residents surveyed said that prices are currently unacceptably high - down by 7 percentage points compared with the last quarter, while 31.6 percent said they could accept the level of prices, a rise of 6.9 percentage points. Expectations that inflation will continue to rise fell 8.9 percentage points over the same period to 72.8 percent.
Around 47 percent of those asked predicted that consumer prices would continue to rise. That's a fall of 14.3 percentage points compared with last quarter, the survey said. However, people are much less optimistic about property prices and the effects of the government's tough measures on the real estate market.
Among the respondents, 74.4 percent thought property prices were "too high to accept", down by 1.1 percentage points from the last quarter, but still the second-highest figure in two years. One third of respondents predicted that housing prices would continue to rise, despite the government's recent measures to cool the market.
With regard to current prices, interest rates and income levels, 85.8 percent of respondents said they would like to save, but 14.2 percent said that they would prefer to spend more, the lowest figure since 1999.
Liu predicted the consumption growth rate this year might show some decline, mainly due to the cooling measures on the real-estate market and the phasing-out of policies designed to stimulate car purchases.
Wang Jun, an economist at the China Center for International Economic Exchanges, said people's willingness to spend usually declined after the traditional Chinese Spring Festival, and that residents are probably saving their money and waiting for the right time to buy property. He predicted that the total growth rate throughout 2011 might be even higher than last year's 18.3 percent, as inflation may rise above 4.5 percent.
China's Consumer Price Index, a main gauge of inflation, rose to a 28-month high of 5.1 percent in November, before slowing to 4.6 in December and then picking up again to 4.9 percent in January.
Some analysts predicted that the figure would rise as high as 6 percent in the first half of the year.
To soak up liquidity and curb inflation, the central bank has raised the reserve requirement ratio for commercial banks eight times since the beginning of 2010 and hiked the benchmark interest rates three times.
According to a survey of bankers conducted by the central bank, about 66 percent predicted that the government would continue with its tightening monetary stance in next three months.
