More China consumers feel better off, Deutsche Bank survey shows

Consumer sentiment in China has improved sharply from last year, a survey by Deutsche Bank AG has revealed, offering a glimpse into the state of household expectations that remain held back by the country’s ailing property sector. Some 54% of respondents polled this quarter said they feel financially better off than a year ago, up from 44% on average in 2024, according to a report released by the German bank today. The results also showed the proportion of those anticipating an income increase in the year ahead rose for the second straight quarter to 60%. The upbeat findings suggest China is increasingly reaping the benefits of the government’s drive to boost household confidence and consumption. Still, the shift in sentiment doesn’t mean people have grown more hopeful when it comes to real estate, with the share of respondents who cited property volatility as a reason to cut spending reaching 63% from 60% earlier. “We think a true turning point in sentiment likely hinges on housing prices stabilizing,” Yi Xiong, Deutsche Bank’s chief economist for China, said in the report. Beijing prioritizes domestic demand to sustain growth Beijing has listed expanding domestic demand as its top economic task in 2025 as the country seeks to offset the impact of U.S. President Donald Trump’s tariffs and achieve this year’s ambitious growth target of around 5%. In a special action plan published over the weekend, policymakers promised a range of measures to revive consumption, including measures aimed at improving childcare and boosting people’s incomes. “China’s action plan to revive consumption follows up on a pledge to deliver stronger steps to lift demand — and it’s a good start,” say Bloomberg economists Eric Zhu and Chang Shu. “The government is addressing critical choke points, with key initiatives aimed at stabilizing incomes and alleviating burdens for child, medical and elderly care.” The improving outlook for consumers is already showing up in data, with retail sales growth picking up more than forecast in the first two months of the year. Wealthier, older consumers in top-tier cities lead spending rebound Deutsche Bank’s findings provide insight into the potential and challenges that lie ahead. The German lender has been conducting its quarterly survey of Chinese consumers in large and medium-sized cities since July-September of 2022. It surveys hundreds of people in the age group of 18 to 65. Similar sentiment and confidence indexes compiled by China’s central bank haven’t been updated since the second quarter of last year. Though China’s entrenched property crisis is still an obstacle for consumers, more people appear ready to loosen their purse strings. The poll found 52% of respondents are willing to increase their discretionary expenditures, the highest share in a year. Deutsche Bank said government stimulus since September likely improved income expectations among urban residents, particularly those in Beijing, Shanghai, Guangzhou and Shenzhen. Consumers aged over 35 and living in top cities are more keen on spending, possibly due to a price recovery in assets such as stocks, it added. The government’s efforts to stimulate the economy have been well received by investors so far. The MSCI China Index has climbed more than 20% in 2025, while the S&P 500 Index has dropped around 4%. “Recent improvement in consumer sentiment, as suggested by our survey, would provide a good opportunity for the government to maximize the impact of its policy measures on consumption,” Yi wrote in the report.

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More China consumers feel better off, Deutsche Bank survey shows