Spend, spend, spend. Not, it appears, in China, where consumers are more interested in saving than splurging their hard-earned cash.

Stimulating domestic demand continues to be a key plank of Beijing’s economic policy as GDP growth slows, exports decline and a switch to high-end manufacturing replaces traditional low-value industries.

But a survey conducted by the People’s Bank of China showed that consumers prefer to save than spend.

Slightly more than 79% of the 18,600 people from 31 provinces surveyed revealed they were more concerned about putting away money for their children’s education and retirement funds.

The release of the PBOC study this week could not be more timely and, at first glance, looks to contradict what has been described as “robust domestic consumption in June.”

Data showed that retail sales were up 9.8%, which was a sharp rise from May’s figure of 8.6%.

‘Front-loading’

But the numbers failed to shed light on the overall picture with heavily discounted auto sales driving the increase amid a sluggish property market.

“Whether [auto sales] is a one-off or front-loading, we’ll have to wait until next month to see if it holds up,” Marcella Chow, a global market strategist at JPMorgan Asset Management, told the Financial Times.

Moreover, there are mixed signals coming out of the world’s second-largest economy.

On Wednesday, the National Bureau of Statistics of China reported that manufacturing activity contracted for the third straight month in July.

The official Purchasing Managers’ Index, a gauge on the health of major companies, came in at 49.7, which was a slight rise from 49.4 in June. Since the 50-point mark separates expansion from contraction, confidence remains fragile in the industrial sectors.

“The PMIs still appear consistent with a renewed slowdown in year-on-year growth in industrial output and broader economic activity,” Julian Evans-Pritchard, a senior China economist at Capital Economics, said in a note to the media.

Twenty-four hours later, an independent survey which tends to focus on medium- and small-sized firms in the private sector was more positive.

Despite manufacturing activity contracting last month to 49.9, the Caixin/Markit factory Purchasing Managers’ Index contained more upbeat stats.

New orders

“Subindices for new orders and production both returned to expansionary territory, while the gauge for new export orders rose slightly even though it was still in contractionary territory,” Zhong Zhengsheng, the director of macroeconomic analysis at CEBM Group, a subsidiary of media group Caixin, wrote.

To underscore the “confidence” factor, “future output activity” is predicted to rise.

“China’s manufacturing economy showed signs of recovery in July,” Zhong said. “Business confidence rebounded, reflecting the strong resilience in the economy. Policies such as tax and fee reductions designed to underpin the economy had an effect.”

Still, China’s GDP growth of 6.2% in the second quarter hit a 27-year low, according to numbers released last week, buffeted by a slowing economy and the trade conflict with the United States.

“Due to the global slowdown and impact from the trade war, our exports will continue to fall and it’s possible they may post zero growth for the year,” Zhu Baoliang, the chief economist at the State Information Center, a major government think-tank, told the media.

Spend, spend, spend might be the answer after all.