Photo Source: Gayot
The Chinese stock market has rallied and bottomed, but it should be noted that the Chinese markets are still very well attached to the US markets. After weak economic news in the United States, the Chinese market followed in much the same way. It was reported that Hong Kong’s retail sales grew at a snails pace compared to last year.
Hong Kong consumer confidence dropping
Consumer confidence in China has dropped with the falling markets in much the same way as in the United States. As the market turns lower, consumer confidence is dropping, leading the way for lower spending and less confidence in what was once one of the fastest growing economies in the world. For measure, sales of jewelry were up 18.4 percent year over year, but down from a 32% increase in April. This coincides very well with consumer confidence as the amount spent on luxury goods typically goes up and down with economic positioning.
No economic clout yet
The economics of North America have yet to entirely impact the Chinese economy, which is somewhat diversified with exports to Europe and other Asian neighbors, such as Japan. Unemployment is still historically very low at 3.3% in the city of Hong Kong. This comes after wages rose 3.8% year over year, but still not beating the record inflation figures.