China's Retail Sales Grow at Fastest Pace Since 2004
China's retail sales grew at the fastest pace in more than three years, buoyed by a stock market rally and higher wages and prices.
Spending climbed 16.4 percent to 699.8 billion yuan ($92 billion) in July from a year earlier, the National Bureau of Statistics said today, after gaining 16 percent in June. The figures aren't inflation-adjusted.
The biggest increase in consumer prices in a decade contributed to the acceleration. Stock-market gains and a 14 percent jump in urban incomes underpinned demand, aiding Premier Wen Jiabao's efforts to boost consumer spending and reduce the economy's dependence on exports and investment.
``Inflation played an important role in gains for food sales,'' said Paul Tang, chief economist at Bank of East Asia Ltd. in Hong Kong. ``But in other categories there's genuine continued gains, and overall growth is steady.''
Some Chinese retail stocks climbed. Youngor Group Co., the country's No. 1 maker of men's clothing by sales, gained 5.9 percent to 29.81 yuan after forecasting first-half profit more than tripled.
Meat, poultry and egg sales jumped 51 percent from a year earlier, the statistics bureau said. Jewelry spending rose 46 percent, automobile sales climbed 43 percent and those of furniture gained 32 percent.
Disposable urban incomes jumped 14.2 percent in the first half from a year earlier and earnings among rural households climbed 13.3 percent. McDonald's Corp., the world's biggest restaurant company, last week said it plans to raise salaries in China by 12 percent.
China will reduce a tax on interest income to 5 percent from 20 percent tomorrow, increasing returns on bank deposits to counter the effects of inflation.
China's economy, the world's fourth largest, grew 11.9 percent in the second quarter from a year earlier, the fastest pace in more than 12 years. Overseas sales jumped 34.2 percent in July.
And here's the data from China Statistics:
In July, the total retail sales of consumer goods reached 699.8 billion yuan, a year-on-year increase of 16.4 percent.
In terms of different regions, the retail sales of consumer goods in urban areas was 476.2 billion yuan, rose by 16.7 percent over the same period of the previous year; that of retail sales at and below the county level achieved 223.6 billion yuan, up by 15.8 percent.
In terms of different industries, the retail sales of wholesale and retail trades was 592.4 billion yuan, a year-on-year increase of 16.5 percent; that of lodging and catering services was 92.3 billion yuan, up by 18.0 percent; that of other industries was 15.1 billion yuan, up by 3.1 percent.