Sentiment among Chinese consumers is at the lowest level since the fourth-quarter of 2011, dragged down by a sharp drop in perceptions about labour market conditions.
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The Westpac-MNI China consumer sentiment index came in at 113.8 points for the third-quarter of 2014, the worst quarterly outcome since a 112.8 reading almost three years ago.
On a monthly basis, the index declined for a second straight month, and remains 7 per cent lower than levels recorded in January. September yielded a reading of 113.2, down 0.1 per cent from August.
The survey recorded roughly stable outcomes on questions posed around business conditions and buying conditions, though respondents were slightly worse off with regards to their personal finances.
The most significant detractor was growing concerns around employment, where the survey fell for a fourth straight month during September to the lowest since February 2009.
MNI Indicators chief economist Philip Uglow said: "It raises questions about whether the authorities' efforts to support the economy since the spring will be sufficient to keep growth in line with the 7.5 per cent target this year."
China has stood by its official forecast in spite of a weaker outlook.
On the weekend, China's finance minister all but ruled out significant stimulus measures, denting the confidence of investors and sparking a sell-off in the Australian sharemarket. The iron ore price, which is at the lowest level in five years at $US79.40 a tonne, has been a victim of slowing Chinese demand for the steel making ingredient and contributed to a fall in the Australian dollar.
Westpac senior international economist Huw McKay argued there was a strong case for policy easing by the People's Bank of China. "Back in June, the employment indicator was sitting at levels that have been associated with policy easing in previous cycles. Three consecutive declines from those already depressed levels... alongside the weaker official data for July and August, collectively provide a watertight case that it would be most unwise for the authorities to return to a neutral policy posture."
He added that consumer risk appetite decreased "materially" with evidence of a greater incentive to save and a fewer Chinese consumers believing that housing investment was the best wealth strategy.
