More than 20 thousand households in 50 Chinese cities were surveyed by the Central Bank of China. The report from the second quarter of this year shows that more than 65 percent of them say the consumer prices are too high. At the same time, more than 68 percent of Chinese residents said housing prices are "unacceptably high" and one fifth expect home prices to continue to rise in the third quarter of this year. Many people interviewed on the street shared similar views.
"I think everything is more expensive, including vegetables, daily commodities, clothing…even house rentals."
"I care more about the rising cost of owning a house, education and medical care."
Compared to the first quarter of this year, the report from the second quarter shows that residents are more willing to spend than invest. The top three investment channels adopted by Chinese residents are mutual fund, bonds, and the real estate market.
"I'd rather spend my money on traveling or leisure time."
"I would choose to invest in mutual funds and national bonds, which is much safer than other investments."
Economists believe the rising prices of vegetables gives people the impression of rising consumer prices. Deputy Director Pan Jiancheng from the National Statistics Bureau says the tense situation will be eased this month.
"In May the price of vegetables jumped 31.2 percent. People are usually very sensitive about vegetable prices. That's why people would think overall commodity prices have risen too fast because 30 percent is a sharp increase."
Pan points out vegetable prices began decreasing in early June. Prices for vegetables like Chinese cabbage, cucumbers and tomatoes have dropped by 10 percent. Plus, consumers now are more willing to spend. Pan believes this is an obvious signal that shows public optimism about future economic development.
"Domestic consumption will surely boost China's economy. But of course, if we want to see a continual boost, then we have to do something. For example, the government has to further push reform of the income distribution system. The social security system, including pensions, medical care and education all need to be improved so that consumers can have more money to spend, and be more willing to spend."
The survey also showed that business people and bankers show less confidence in the current Chinese economy. More than 30 percent of the business people believe the economy is still cold. This is the fourth consecutive quarter where half of the business people interviewed said they had low expectations for the economy. Bankers were even more negative. About 40 percent of the bankers said they see the Chinese economy slowing, and remain cautious about expansion amid monetary policy changes.