Overall, China’s total bank lending slowed for the second consecutive month in February in response to Beijing’s monetary tightening agenda. But while total lending may be falling, signs suggest that upbeat consumers are bolstering consumer lending.

The country’s most substantive bank card index rose to its highest level in five months in February as inflation drove strong discretionary spending on items such as gold and jewellery. Comprehensive surveys conducted by China Confidential showed that urban consumers plan to increase spending on non-essential items and are turning to credit to defend against rising inflation.

The bankcard consumer confidence index, compiled by UnionPay, China’s biggest payment settlement service, rose 0.51 points from January to 86.04 in February – its highest point since September last year. The higher the index, the more bankcards are used to purchase non-essential items such as luxury goods and travel services.