Mainland posts 16.4pc growth in retail sales
Surging income, consumer demand fuel fastest rise in 3 years
The mainland's retail sales grew last month at the fastest pace in more than three years, signalling steadily rising demand as a result of surging income and the state's consumption-stimulation policy.
The annual growth of retail sales accelerated to 16.4 per cent to reach 699.8 billion yuan from 16 per cent in June, the National Bureau of Statistics said in a statement.
The gain was the biggest since May 2004 after adjusting for distortions caused by the week-long Lunar New Year holiday, which led to a 16.9 per cent gain in February this year.
In the seven months to July, retail sales rose 15.5 per cent from a year earlier to 4.904 trillion yuan, said the bureau's online statement posted yesterday.
Retail sales increased 13.7 per cent last year.
Prakash Sakpal, an economist with ING, said a 37 per cent year-on-year surge in car sales last month was a sign of strong retail sales growth.
The central government has been trying to shift the growth from over-reliance on capital investment and export to domestic consumption.
Chinese households are known for their high savings rate largely due to a flimsy social welfare net and medical coverage. Household consumption in the nation is below 38 per cent of gross domestic product, a record low for any major economy.
This year the government has increased subsidies to low-income families and spent more on education and health, two segments until now requiring heavy outlay by ordinary Chinese, in an effort to enable households to have more spare cash.
Retail sales have been buoyed by fast-rising incomes as wages in urban areas have almost doubled in the past five years.
Urban disposable incomes rose 14.2 per cent from a year earlier in real terms in the first half, while rural cash incomes rose a real 13.3 per cent.
Rising asset prices also have helped boost private consumption as people made money from investment in securities.
The CSI 300 stock index has climbed more than 130 per cent this year, making it the world's best performing market.
Sales of grain and oil rose 45 per cent last month, while sales of meat, poultry and eggs grew 51 per cent, the bureau said, reflecting recent sharp increases in food prices.
The bureau reported on Monday that food prices climbed 15.4 per cent last month over July last year, bringing the consumer inflation rate to a decade high of 5.6 per cent.
Growth in retail spending has lagged behind that of exports, which soared more than 34 per cent last month.
Urban retail sales rose 16.7 per cent year on year to 476.2 billion yuan, while rural retail sales were up 15.8 per cent at 223.6 billion yuan.
Combined sales for the wholesale and retail sectors rose 16.5 per cent from a year ago to 592.4 billion yuan.
Sales in the catering sector grew 18 per cent to reach 92.3 billion yuan.
Telecommunications equipment sales rose 6.1 per cent.
Vehicle sales rose 42.7 per cent while sales of oil and related refinery products climbed 16.3 per cent.
Clothing sales rose 24.9 per cent. Sales of daily consumer goods expanded at 25.4 per cent. Sales of household appliances increased 18 per cent.