Like many trendy women in Shanghai, Bao Shengsheng, who lives with her parents, used to spend more than 80 percent of her 5,000-yuan (US$732) monthly income on shopping and entertainment.
But the 24-year-old has begun to feel the chill of the economic winter. Although her job at the Chile Consulate General in Shanghai seems secure, at least for now, she shares the growing worries of fellow citizens over the country's - especially Shanghai's - economic prospects.
Bao reflects the concern of the rest of urban residents in the country as a survey shows their consumer confidence index (CCI) has dropped to a six-year low.
The study, conducted by Beijing-based research and consultancy firm Horizon recently, shows the CCI fell 4.5 percentage points from September to 59.9 in December.
The change in Bao's spending habit is manifested in a renewed propensity to save for the rainy day.
"I cook more at home I can't afford to be as carefree as before," Bao, who used to dine out four days a week, said.
The Horizon poll covered 3,010 people in 10 cities, with more than half of them saying they would tighten their purse strings this year.
More than 40 percent of the respondents with a monthly household income of over 8,000 yuan said they would cut their spending and investment, and 54.5 percent vowed to save more in banks despite interest rate cuts.
Referring to the survey, Jacques Penhirin, partner of OC&C Strategy Consultants Greater China, said: "It appears that consumer confidence may have reached a tipping point."
Though Chinese consumers' sentiment has remained higher than those of people in many other countries, they have started to feel the impact of the global economic crisis, he said.
The first thing people shun when they start saving more is dining out - 15.5 percent of the respondents said they would cut spending on restaurants compared with only 9.2 percent that would stop buying luxury goods.
In another survey, conducted by market research company Data Driven Marketing Asia (DDMA), 42 percent of the respondents said they planned to cut or delay leisure travel plans this year. The survey covered 4,500 people in five major cities, including Shanghai.
The surprisingly strong retail sales during New Year's holiday brought little comfort to many retailers, who are instead bracing for a slump in the coming months.
"An overall retail slowdown may be round the corner, and second-tier players with previously high expansion plans are likely to suffer," Penhirin said.
"Consumer confidence cannot be expected to fully recover before late this year or early 2010," said Qiu Yujun, an analyst with market research firm Planet Retail.
(China Daily January 9, 2009)
