China's bankcard consumer confidence drops in February

Chinese consumer spending using bankcards dropped in February illustrating falling confidence, according to the Bankcard Consumer Confidence Index (BCCI) released on Monday.

The BCCI, compiled by the Xinhua News Agency and China UnionPay, a national bank card association, dropped 0.90 points to 86.20 in February from January.

A lower reading in the index shows a decline in consumers' confidence to spend.

The index was down 0.49 points on a year-on-year basis, according to the BCCI report.

The value of transactions recorded at supermarkets took a higher share in the bankcard holders' consumption in February, about 1.10 percentage points up from January as food prices climbed and people stocked up for banquets during the Spring Festival, according to the report.

Due to the high demand for food and everyday goods, consumers reduced spending in other areas including automobiles, electronic appliances, hotels, air, railway, gas and jewelry.

With less business activities during the holiday, the value of transactions recorded at hotels dropped 0.34 percentage points in February from January.

The country's consumer inflation rebounded to a 10-month high of 3.2 percent last month.

China's producer price index (PPI), which measures inflation at the wholesale level, fell 1.6 percent year on year in February. The drop marked the 12th straight month of declines after the PPI fell in March 2012 for the first time since December 2009.

The BCCI index, first released in April 2009, is based on bank card transaction data and analysis of structural changes in urban consumption.