Chinese consumers continue to express a sense of caution regarding the world’s second-largest economy, as per the findings of a survey conducted by Bank of America Corp. Despite some initial signs of economic improvement in recent activity data, expectations for future income have taken a hit.

The survey, which included 1,023 participants and took place from October 6-8, revealed a decline in the number of respondents anticipating wage increases, dropping from 29% in August to 26%. Notably, only 31% of consumers interviewed expressed plans to increase their spending over the next six months, down from 37% in the prior survey.

This growing pessimism contrasts with recent improvements in economic data, which prompted several Wall Street banks, including Citigroup Inc., to revise their growth forecasts for the year. The findings reinforce the argument for additional stimulus measures from the Beijing government, as there are indications that policymakers are preparing to expand fiscal policies.

The survey did show a modest improvement in sentiment among residents in the largest, Tier-1 cities. However, this positive shift was overshadowed by the prevailing pessimism in Tier-2 and smaller cities.

The survey also highlighted a dimmer view of the property market. Almost 40% of respondents now anticipate a decline in home prices over the next year, a notable increase from the 27% figure reported in the August survey. Despite various housing stimulus measures introduced by authorities nationwide, plans for future home purchases or upgrades remained stagnant.

These results align with a recent survey by Morgan Stanley, which found that over 80% of Chinese households are still hesitant or uncertain about entering the property market when questioned about their property purchase plans.

Furthermore, the Bank of America survey suggests that consumer sentiment may continue to moderate in the aftermath of recent holidays. Participants in the survey indicated potential cutbacks in spending on furniture, travel, and luxury apparel or footwear.

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