Chinese consumers’ confidence stabilized in Q3, due to lower inflation across all categories and double-digit disposable income growth in both urban and rural regions, research from Nielsen showed on Tuesday.

The quarterly consumer confidence index rose by 1 percentage point to 106 in Q3 – 14 points ahead of the global average, according to Nielsen’s survey. The index dropped to 105 in the second quarter, from 110 in Q1.

Less concern over inflation in the last quarter drove up confidence among consumers in first-tier cities, which posted a 10-point gain in willingness to spend in 2013. CPI rose 1.9 percent year-on-year in September, easing from 2 percent in August, according to the National Bureau of Statistics.
With the purchasing managers’ index climbing further in October, many economists believe that China’s economy may have bottomed out in Q3. The PMI hit 50.2 in October, up from 49.8 in September, according to the bureau.

Meanwhile, domestic consumption played an increasingly important role in fueling GDP growth. “With the fast growth of China’s middle class and the urbanization process, people will be more willing to spend and that will help the economy achieve a soft landing,” “First-tier cities are making progress toward a more service-based economy and thus seemed better at insulating workers from some of the manufacturing doldrums that China experienced earlier in the year.” Nielsen’s survey also shows that consumers from middle-income families in first-tier cities with an average monthly income of 7,000 yuan ($1,110) to 9,999 yuan benefited the most from lower CPI and consumer stimulus measures, showing a 10-point jump in their willingness to spend in 2013. 

And also, active promotional activities in Q3 boosted consumers’ willingness to spend.