China holiday sales grow at slowest in decade amid crackdown on graft

Lunar New Year holiday spending on the mainland grew at its slowest pace in at least a decade as the Communist Party's crackdown on corruption deterred the giving of luxury gifts.

Retail sales from January 31 to February 6 rose 13.3 per cent to 610.7 billion yuan (HK$776.4 billion), the Ministry of Commerce said on Thursday.

Adjusted for retail price inflation, the decline in the growth rate from 14.7 per cent during the holiday last year would be milder, said Chang Jian, an economist at Barclays Capital.

"The anti-graft campaign has made consumption cheaper and more affordable for Chinese households," Chang said.

She expects full-year retail sales growth this year of 14 per cent in nominal terms, up from last year's 13.1 per cent, even though GDP growth is projected to slow to 7.2 per cent this year from 7.7 per cent last year.

Chang forecast consumer inflation of 3 per cent this year, up from 2.6 per cent last year.

Prices remained stable during the holiday period from the previous week, with no change in rice prices and a 0.5 per cent increase in the price of pork.