Headlines from around the world decry the state of the Chinese economy. The New York Times, The Wall Street Journal and The Financial Times have published articles about the decline in stock market values and the tumbling Renminbi. In their August 29, 2015, edition, the cover page of The Economist magazine was titled “The Great Fall of China.”
From the Asia-Pacific hub of Visa in Singapore, Visa Consulting & Analytics pondered the impact this might have on Chinese consumers, and credit risk in particular. To better inform our clients, we conducted consumer research to help us understand the impact of the economy on Chinese consumers. We surveyed 2,514 consumers across China to understand their views about the Chinese economy.
The results were surprising: People aren’t concerned about their personal financial situation and survey findings indicate that personal consumption expenditures may remain stable.
Download the white paper (PDF)
The white paper reflects these observations in detail. We also queried consumers about debt, changes to debt, and their likelihood to continue paying debt on time. That information is available to VCA clients upon request.
Impact on merchants and issuers
In contrast with previous economic downturns, the current financial crisis hasn’t impacted the Chinese consumer substantially. Unless exchange rates make foreign goods significantly more expensive, demand will remain strong, but merchant profit margins may wane.Issuers have less reason to be concerned about consumers meeting debt obligations as well, since consumers we queried told us that they are not financially stressed.
We’d love your thoughts and feedback. Please send any questions or feedback to mail to VCA@visa.com.