Plummeting car sales, sluggish retail sales data, a cooling housing market — those are all stoking fears of weakening consumer spending in China amid its slowing economy. But analysts say they’re not concerned, and expect Chinese shoppers to keep spending.

On Monday, China’s top auto industry association reported that the country’s automobile car sales in January fell 15.8 percent from a year earlier to 2.37 million. That marked the seventh straight month of declining sales in the world’s largest auto market.

Citigroup’s chief economist of China, Li-gang Liu, said he expects Beijing to announce some new measures to boost consumption, particularly in the auto sector.

In addition, the impact of personal income tax cuts — which China announced last year — should be considered, he told CNBC’s “Squawk Box” on Tuesday. “Once the sentiment starts to stabilize, we think that consumers will be happy to consume again.”

Despite rapidly increasing household debt, Liu thinks that “China’s consumers still have further room to leverage up,” as the ratio of savings to disposable income among the population is one of the highest among G-20 countries.

Concerns ‘overdone’

Another analyst, Oxford Economics senior economist, Tianjie He, said that fears of slower spending have been overstated.

“While we expect consumption growth to slow, we think that the anxiety about China’s consumers is largely overdone,” said He in a January note.

She explained that while total retail sales growth in 2018 declined to 6.9 percent year-on-year, from a 9.1 percent increase the year before, it does not include services which account for over 50 percent of total consumption. Slowing retail sales therefore “masked the solid growth in consumer spending on services,” she said.

For example, urban household expenditure on healthcare rose by 15.1 percent year-on-year in 2018, compared to 9 percent in 2017, He added.

China’s services sector maintained a solid pace of expansion in January even though growth moderated slightly, the Caixin/Markit services purchasing managers’ index (PMI) showed.

In addition, sales of gold, silver and jewelry rose last year compared to 2017’s growth rate, and luxury companies also reported “decent” increased sales in China in 2018, He said.

All that suggests that “the anxiety regarding China’s consumers, which is largely based on waning demand for cars, is likely to be overdone.”

Rural reforms

While China has gone on a stimulus drive to revive its slowing economy, some analysts say the authorities have not done enough.

But Barclays Chief China Economist Jian Chang said she expects infrastructure investments to pick up in the middle of this year. That will help offset the effects of the slowing housing market and real estate investment in the country, she told CNBC’s “Street Signs” on Monday.

More can be done to unlock the “positive property equity” that many Chinese households have, Citigroup’s Liu said, referring to the real value of a property.

“If Chinese banks can offer various products such as home equity loans for people to withdraw their positive equity early on, this could create tremendous consumption power in China,” he said.

In addition, rural land reforms in China could unleash a “wealth effect” among rural farmers, Liu added.

“If the government can firm up land leasing titles for rural farmers, this could create tremendous wealth effect among rural families. Our estimate is $20 trillion wealth effect among rural families.”

“Down the road, China’s consumption potential is huge,” Liu concluded.