China Westpac-MNI Consumer Sentiment for August came in at another improvement, at 116.5 .

For a 3rd consecutive rise

Westpac commentary on the result is sanguine (bolding is mine):

  • The Chinese economy remains a major source of concern for global investors. This anxiety is shared to some degree by Chinese households, but where foreign scepticism vis-à-vis growth prospects appears to be deepening on the back of weak business surveys and equity turmoil, consumers are tentatively marking up growth prospects, albeit from a very low level.
  • With the consumer now a key engine in China's evolving growth model, this incipient divergence demands very close attention.

They say:

2 major 'events' during the sampling period ... the CNY fix shock & the Tianjin explosion

Say the CNY change was ambiguous for confidence, while the dreadful explosion 'undoubtedly negative'

Equity market distress & latest package of monetary easing came after the survey had closed

Three of the five components increased in August:

  • Positive impulse was strong across current & expected family finances and 'business conditions next 12mths'
  • 'Business conditions next 5yrs' moved slightly lower, as did 'time to buy a major household item'

The employment indicator was the pessimistic outlier in the July survey, recording a discomforting drop that raised concerns about downside risks in the labour market.

  • Those concerns have been partially alleviated by a decent rebound in August.
  • Even so, while so ever job security remains in short supply we remain on the alert for further monetary and fiscal easing
  • That is the only sensible position to take given the primacy of full employment in the leadership's policy calculus.

Westpac say they are still looking for more easing:

  • Our long held view that additional monetary easing was in the pipeline was partially met last night - however, we still see a minimum of a further 50bps in interest rate cuts to come.