Domestic consumers continue to have strong confidence on China's economic prospects, said a survey released on Friday by consultancy firm McKinsey & Co.

The moderated gross domestic product (GDP) growth in the second quarter had a "minimum" impact on consumer confidence, said the survey of nearly 15,000 consumers in 49 Chinese cities.

According to the survey, consumer confidence dipped only 1 percent in the second quarter.

The nation's GDP growth slowed to 10.3 percent in the second quarter compared with 11.9 percent in the first three months of the year, the National Bureau of Statistics said, as the effects of the 4 trillion yuan (US$586 billion) stimulus package continued to wind down and controls on bank lending and property constrained the economy.

"Chinese consumers on average have extremely strong confidence and unlike other consumers in other countries are far more resilient to economic fluctuations," said Max Magni, who leads McKinsey's consumer goods practice in China.

The 8 percent growth in consumer confidence index last month clearly shows that Chinese customers have come out of the financial crisis in a strong way, he said.

The survey said rich customers, accounting for 24 percent of the consumers, made more cutbacks in the second quarter while most of the others made almost no adjustment to their spending.

The survey said China's domestic consumption is expected to increase by 11 percent every year, and stay ahead of the GDP growth rate.

"By 2020, China's domestic consumption will account for 42 percent of the GDP, up from the current 36 to 37 percent", said Vinay Dixit, senior director of the Asia Consumer Center at McKinsey.

Domestic consumption will, however, not see a sudden jump despite more shopping malls and luxury outlets coming up, said Dixit.

"Only 1 percent of the Chinese consumers buy luxury goods on a regular basis and hence the new shops and facilities will only cater to them. Stimulating the balance demand would be a gradual process," Dixit said. McKinsey conducted its first Annual Chinese Consumer Study in 2005 and has so far surveyed 46,000 consumers in China.

(China Daily August 21, 2010)