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Retail sales continue to expand at a slower pace
By Wang Yanlin |
September 10, 2011, Saturday
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Print Edition
Print Edition
RETAIL sales grew at a slower pace again in August, fueling concerns over whether China can rely on domestic demand to power its economy.
Retail sales rose 17 percent from a year ago to 1.47 trillion yuan (US$229 billion) last month, the National Bureau of Statistics said yesterday. The pace compared with July's 17.2 percent and June's 17.7 percent, but was stronger than the 16.9 percent in May.
Taking price effects into account, retail sales may be even weaker than they look. Consumer Price Index, the main gauge of inflation, rose 6.2 percent from a year earlier in August, signaling more expensive goods on the shelves and meaning people have to pay more - which was calculated into retail sales.
"Domestic consumption is expected to be strong this year amid rising wages, but the reality is a disappointment for those who bet that domestic demand can lead China's economic growth," said Li Maoyu, an analyst at Changjiang Securities Co.
He said this was possibly because stimulus measures for household appliances and vehicles are being gradually phased out this year, while people don't feel comfortable enough to increase spending in a slowing economy.
Consumption contributed 47.5 percent to China's first-half economic output, while investment devoted 53.2 percent, and exports had a negative 0.7 percent input.
Huang Yiping, an economist at Barclays Capital, said retail sales will grow "stably" in the coming months, but will still fall short of expectations of becoming a major force driving the economy.
Barclays Capital expected China's economic growth will retreat to about 9 percent in the third quarter because of further moderation in economic activities, and drop below 9 percent in the fourth quarter. Gross domestic product grew 9.5 percent in the second quarter and 9.7 percent in the first three months.
Property-related sales continued to soften due to a sluggish real estate market. Growth in sales of furniture and construction materials slowed to 29.5 percent and 25.4 percent in August, compared with July's 33.1 percent and 32.4 percent, respectively.
Growth in household electronics sales fell to 14.8 percent from 18.9 percent. Jewelry sales stayed firm in August, rising 44 percent, same as in July. Auto sales grew 12.4 percent, compared with 11.9 percent in July.
Retail sales rose 17 percent from a year ago to 1.47 trillion yuan (US$229 billion) last month, the National Bureau of Statistics said yesterday. The pace compared with July's 17.2 percent and June's 17.7 percent, but was stronger than the 16.9 percent in May.
Taking price effects into account, retail sales may be even weaker than they look. Consumer Price Index, the main gauge of inflation, rose 6.2 percent from a year earlier in August, signaling more expensive goods on the shelves and meaning people have to pay more - which was calculated into retail sales.
"Domestic consumption is expected to be strong this year amid rising wages, but the reality is a disappointment for those who bet that domestic demand can lead China's economic growth," said Li Maoyu, an analyst at Changjiang Securities Co.
He said this was possibly because stimulus measures for household appliances and vehicles are being gradually phased out this year, while people don't feel comfortable enough to increase spending in a slowing economy.
Consumption contributed 47.5 percent to China's first-half economic output, while investment devoted 53.2 percent, and exports had a negative 0.7 percent input.
Huang Yiping, an economist at Barclays Capital, said retail sales will grow "stably" in the coming months, but will still fall short of expectations of becoming a major force driving the economy.
Barclays Capital expected China's economic growth will retreat to about 9 percent in the third quarter because of further moderation in economic activities, and drop below 9 percent in the fourth quarter. Gross domestic product grew 9.5 percent in the second quarter and 9.7 percent in the first three months.
Property-related sales continued to soften due to a sluggish real estate market. Growth in sales of furniture and construction materials slowed to 29.5 percent and 25.4 percent in August, compared with July's 33.1 percent and 32.4 percent, respectively.
Growth in household electronics sales fell to 14.8 percent from 18.9 percent. Jewelry sales stayed firm in August, rising 44 percent, same as in July. Auto sales grew 12.4 percent, compared with 11.9 percent in July.
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