Retail sales in 2004 are expected to rise 13.0 percent over last year to reach 5.2 trillion yuan (US$628.3 billion) and will likely climb more than 10 percent next year, said Assistant Minister of Commerce Huang Hai in a press release on Sunday.
After adjusting for inflation, retail sales should be up 9.8 percent, 0.6 percentage points higher than last year's growth rate.
Total retail sales have already topped 5 trillion yuan (US$604 billion), according to Huang.
Retail sales in October rose 14.2 percent year-on-year to 498.3 billion yuan (US$60.2 billion), compared with a 14.0 percent rise in September and 13.0 percent for the first three quarters, the National Bureau of Statistics said last month.
"Next year, total retail sales will keep climbing fast, more than 10 percent higher than this year," Huang said.
Strong consumer spending, especially in cars, housing and telecommunications products, has supported the steady growth.
Rising prices were also contributors, with retail prices for fuel climbing about 11 percent and food up 10 percent.
Huang reported that sales of foreign-invested retailers grew steadily, but he did not provide a specific number. "Foreign retailers continue to expand their investment in China and 21 new foreign-funded retail businesses have been approved so far this year," he said.
Foreign retailers are expected to win more of China's retail market as the country, entering its fourth year in the World Trade Organization, lifts most restrictions on retail business.
The Ministry of Commerce issued a policy statement in April indicating that these promises would be implemented beginning December 11.
China is abolishing joint-venture requirements and ending restrictions on the location and number of foreign-funded stores, providing important opportunities for foreign retailers. Some of the market leaders, including Wal-Mart, Carrefour and Metro, have already announced their expansion plans.
Huang said that chain stores -- a new mode of retailing in China -- have claimed a greater share of the sector.
Sales of China's 30 largest chain operators surged some 38 percent in the first half, far outpacing the 12.8 percent overall retail growth rate.
Retail sales of telecommunications products surged 42.8 percent year-on-year in the January-October period, while car sales climbed 26.1 percent.
Catering industry sales were also strong in the first ten months, rising 22.3 percent to hit 596.7 billion yuan (US$72.1 billion).
Retail sales exceeded 400 billion yuan (US$48.3 billion) in each of the first ten months, with no major fluctuations.
Ren Xingzhou, an expert with the State Council Development and Research Center, told China Daily that the rise in sales for the year is in line with expectations.
Strong growth in the retail sector is a good sign of the healthy overall economic growth, as the central government is trying to cool investment while lifting consumption, Ren said.
Compared with investment and exports, which have maintained strength in recent years, growth in consumption has been moderate.
Boosting consumption will continue to be a focus of the government's macroeconomic policies, according to Huang. Bolstering spending power is an important part of that plan: disposable income of urban and rural residents grew 7.0 and 6.0 percent, respectively, in the first ten months, and 9 million new jobs were created.
(China Daily December 13, 2004)