China's retail sales are likely to grow by 15.8 percent this
year, the fastest pace in a decade, according to a report from the
State Information Center released yesterday.
It would be 2.1 percentage points higher than last year, and 0.6
of a percentage point higher than the January-May period.
The center, which is under the National Development and Reform
Commission, attributed the projected strong growth to rising
incomes of both urban and rural residents, strong economic growth
that bolsters consumer confidence and a booming catering business,
as well as brisk auto and housing sales.
The government raised salaries for civil servants "by a large
margin" in 2003, 2004 and 2006 and increased subsidies and minimum
living allowances for the poor, the agency said in the report.
The center said rising grain and food prices and a continuing
minimum grain purchase price scheme would help increase rural
residents' incomes, which when adjusted with inflation could grow
faster this year than last year's 7.4 percent.
The center suggests that the government should make more efforts
to protect consumer interests to push consumption.
"Pension, education and healthcare reforms during the 1997 -
2000 period had had a big impact on people's consumption," it said
in the report, referring to rising costs in those sectors in the
wake of reforms that dampened people's confidence for retail
consumption.
Efforts in recent years, however, have encountered serious
opposition from various interests and the public has not benefited
much, the report said.
The report also advised the government to avoid any drastic
measures on the booming stock market to let the "wealth effect" of
rising stock prices strengthen consumer confidence.
The report minimized impacts from higher inflation, noting that
if China's economy grows by around 11 percent this year, an
inflation rate of 3 to 5 percent should be acceptable.
China's consumer price index went up by 3.4 percent in May, the
highest in more than two years, breaking the 3 percent benchmark
set by the central bank for this year.
In another development, the National Bureau of Statistics
yesterday revised the figure for China's year-on-year gross
domestic product growth in 2006. The revised rate is 11.1 percent,
0.4 of a percentage point higher than the previous figure of 10.7
percent.
(China Daily July 12, 2007)
