As Chinese demand for commodities wanes and markets fret over a slowdown in the world’s second-largest economy, last we received a ray of hope from the 1.3 billion Chinese consumers.

The Westpack MNI China Consumer Sentiment increased to 118.2 in September, the highest since 2014 and a leading indicator of mainland Chinese consumer strength.

The survey of 1000 Chinese consumers showed that general consumers ‘views of the economy were improving due to increased stability in the housing market and the fact that only around 11% of households are invested in the stock market.

As China slows, fears are increasing that there will be a fast reduction in GDP growth, known as a ‘hard-landing’. Last night’s data will go some way to quell these fears and lends support to the view that China is going through an inevitable transition to an economy that is increasingly reliant on domestic demand.

According to the World Bank, Chinese household consumption was only 36% of GDP which compares to 64.4% in the UK and 68.5% in the US.

China’s largest component of GDP is currently net exports. As exports slow the potential for personal consumption to grow as a percentage of GDP is key to China’s future economic growth.