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)
