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Retail sales increase 19%
By Zhang Fengming |
October 22, 2010, Friday
|
Print Edition
Print Edition
CHINA'S retail sales edged up last month as rising wages continue to buoy household spending.
Sales grew 18.8 percent from a year earlier, after showing an 18.4 percent gain in August, the National Bureau of Statistics reported yesterday.
The monthly figures remain above a five-year average of 16.6 percent growth.
"Rising incomes, improving labor market conditions, strong credit growth and healthy public spending have lifted retail sales," said Matt Robinson, a Moody's Analytics senior W economist.
By categories, gold and silver jewelry led the sales gains with 54.9 percent growth. That was followed by increases in furniture, entertainment, office equipment and autos.
The retail sales figures show a shift in buying habits away from daily necessities to more upmarket products as China's middle class widens, said Robinson.
In September, retail sales in the countryside grew at a faster pace than in cities, reflecting government policies aimed at raising the disposable incomes of poorer rural residents.
Retail sales totaled 1.35 trillion yuan (US$198.53 billion) in September, pushing the nine-month figure up 18.3 percent to 11.1 trillion yuan.
Economist said, however, that rising prices may bite into sales in the months to come. In September, inflation hit a 23-month high.
"The growth of the retail sector actually strengthened the authorities' expectations of higher inflation risk," said Lu Zhengwei, an Industrial Bank senior analyst.
Robinson said China's new round of government controls to cool inflation and damp spiraling house prices may subdue consumer spending in coming months.
On Tuesday the central bank delivered a surprise increase in deposit and lending rates, its first in nearly three years.
Still, many analysts see enduring strength in consumer spending.
"Robust and steady income growth has kept consumption strong," said Qu Hongbin, HSBC's chief economist in China.
"Coupled with the low debt of Chinese households and the impact of continued improvements to the country's social security system, consumer consumption looks well armed to weather any downturn in private property prices," Qu said.
Sales grew 18.8 percent from a year earlier, after showing an 18.4 percent gain in August, the National Bureau of Statistics reported yesterday.
The monthly figures remain above a five-year average of 16.6 percent growth.
"Rising incomes, improving labor market conditions, strong credit growth and healthy public spending have lifted retail sales," said Matt Robinson, a Moody's Analytics senior W economist.
By categories, gold and silver jewelry led the sales gains with 54.9 percent growth. That was followed by increases in furniture, entertainment, office equipment and autos.
The retail sales figures show a shift in buying habits away from daily necessities to more upmarket products as China's middle class widens, said Robinson.
In September, retail sales in the countryside grew at a faster pace than in cities, reflecting government policies aimed at raising the disposable incomes of poorer rural residents.
Retail sales totaled 1.35 trillion yuan (US$198.53 billion) in September, pushing the nine-month figure up 18.3 percent to 11.1 trillion yuan.
Economist said, however, that rising prices may bite into sales in the months to come. In September, inflation hit a 23-month high.
"The growth of the retail sector actually strengthened the authorities' expectations of higher inflation risk," said Lu Zhengwei, an Industrial Bank senior analyst.
Robinson said China's new round of government controls to cool inflation and damp spiraling house prices may subdue consumer spending in coming months.
On Tuesday the central bank delivered a surprise increase in deposit and lending rates, its first in nearly three years.
Still, many analysts see enduring strength in consumer spending.
"Robust and steady income growth has kept consumption strong," said Qu Hongbin, HSBC's chief economist in China.
"Coupled with the low debt of Chinese households and the impact of continued improvements to the country's social security system, consumer consumption looks well armed to weather any downturn in private property prices," Qu said.
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