CHINESE consumers remained upbeat in the first quarter with consumer confidence rising faster in smaller cities, an industry report revealed this week.

The country's consumer confidence index reached 108 in the first quarter, 15 points higher than the global average, Nielsen China said in a quarterly report.

"Chinese consumers' personal income and employment prospects remained stable, reflecting optimism about the country's economy," said Yan Xuan, president of Nielsen China.

China's CCI returned to a normal level after falling eight points in the last quarter of 2012 due to stock market slump, he commented.

Consumer willingness to spend rebounded to 39 points, the highest in more than two years.

Rural residents' confidence index topped 112 despite dipping two points from the previous quarter. Consumer confidence index in first-tier cities gained six points to 109.

About 21 percent of respondents said they would increase spending on food and beverage while 15 percent will spend more on other consumer merchandise.

Spending on premium products and services, especially those with "green" features, is likely to boost retail sales, Nielsen's report said.

"China's policy shift to demand side stimulus from supply side stimulus will favor more consumer companies hoping to tap demand in the country," said David Calhoun, chief executive officer of Nielsen.

Nielsen's quarterly survey polled 29,000 consumers worldwide, including 3,500 in China.