China's consumer confidence index (CCI) dropped in the second quarter, reflecting an expected cool down in the country's economy.

The index fell 0.7 percentage points from the previous quarter to 94.1, said the National Bureau of Statistics (NBS) on Wednesday.

The index was also 2.7 percentage points lower than in the same period last year.

Consumers' weak confidence mirrors the current macro-economic condition, as the rate of growth is slowing," said Cai Zhizhou, deputy director of China Center for National Accounting and Economic Growth, Peking University.

The country's economic growth is expected to slow in the latter half, resulted from the government's efforts in taming inflation, draining excessive liquidity, and controlling investments, according to analysts.

The value of China's exports in the first five months rose 22.9 percent from the same period last year. The growth rate was 4.9 percentage points lower than that of the first five months of last year.

The growth rate of urban fixed-asset investment in January-May also fell 0.3 percentage points year on year.

"The weaker CCI also reflects consumers' worries over the high commodity price level in the domestic market. Consumers are trying to avoid some unnecessary expenditures," said Zhuang Jian, Asian Development Bank's senior economist.

China's consumer price index (CPI), the main gauge of inflation, rose 7.7 percent in May from the same month last year. The figure was 8.5 percent in April and a 12-year-high of 8.7 percent in February.

"Despite a surging commodity price, the bearish stock market, which continued its downward momentum, also contributed to upsetting consumers' confidence," added Zhuang.

The CCI, which measures consumers' outlook toward employment, the economy, regular income, stock market and quality of life, was released following the disclosure of a slightly lower entrepreneurial confidence index and a lower business climate index, both year-on-year figures for the second quarter.

China's business climate index dropped 8.6 points to 137.4 points from last year's second quarter, while the entrepreneurial confidence index dipped 8.3 points to 134.8 from the same period last year.

(Xinhua News Agency July 10, 2008)