The increase in China's retail sales volume exceeded 20 percent year on year in the last eight months and is still accelerating enough to sustain economic growth above 9.5 percent for the rest of the year, a HSBC report said.
According to the report "China Economic Spotlight" released yesterday, consumer spending was robust despite a slow economy, the disastrous earthquake and the cancellation of May Day golden week.
Taking into account the retail price index, the real retail sales growth hit a decade record of 15.4 percent year on year to about US$100 billion in July from 14.8 percent in June, substantially higher than the monthly average of 12.4 percent in 2007.
Both urban and rural areas showed strong retail sales growth in real terms over the same period last year, with rural retail up 14 percent to 280 billion yuan (US$41.18 billion) and that of urban areas up 17 percent to 600 billion yuan.
Strong consumer spending can be attributed to the rapidly increasing expenditure on accommodation and catering, up 26.5 percent year on year in July, and the robust growth of wholesale and retail trading.
In terms of commodities, petroleum products, jewelry, cosmetics, garments and automobiles are taking the lead. Petroleum product sales rose 55.2 percent year on year in July from 44.4 percent in the first half, reflecting the still strong demand despite the fuel price rise in June.
In real terms, urban disposable income growth has maintained 10 percent growth annually in the last three years, while rural residents' net income is increasing even faster.
With nearly US$1,900 per annum of disposable income for urban residents and almost US$700 per annum cash income for farmers, Chinese people are upgrading their consumption structure, said the report. They spend more on recreational goods and dine out more frequently, hence the fast rising sales of automobiles, garments, cosmetics and jewelry.
(Xinhua News Agency August 27, 2008)
