China's retail sales climbed at the fastest pace since at least 1999, signaling that domestic consumption may help to buffer the world's fourth-biggest economy against an export slowdown.
Sales rose 22 percent to a record 814.2 billion yuan ($116 billion) in April after gaining 21.5 percent in March, the statistics bureau said today. That was more than the 21 percent median estimate of 27 economists surveyed by Bloomberg News.
China needs to save less and boost consumption to rebalance an economy skewed toward investment and overseas sales, central bank Governor Zhou Xiaochuan said May 10. The 27 percent jump in sales of household electronics was a boost for Suning Appliance Co., a home-appliance retailer planning to sell new shares to fund the opening of 250 stores.
"China's retail sales will keep growing strongly,'' said Sumei Tang, a Sydney-based economist at Moody's Economy.com. "Incomes are growing rapidly and the government is very keen to stimulate consumer demand to help offset weaker export growth.''
The yuan traded at 6.9872 versus the dollar as of 3:17 p.m. in Shanghai after closing yesterday at 6.9882.
The sales figures are swelled by inflation close to the fastest pace since 1996. Consumer prices climbed 8.5 percent in April from a year earlier as food costs soared.
The earthquake yesterday that killed almost 10,000 people may further fuel inflationary expectations in some parts of China by disrupting supplies, Ting Lu and T.J. Bond, economists at Merrill Lynch & Co. in Hong Kong, said in a note.
Petrol, Jewelry, Grain
Petroleum sales climbed 45 percent in April, jewelry rose 41 percent, and grain and cooking oil jumped 36 percent, today's report showed.
L'Oreal SA, the world's biggest cosmetics maker, said last month that growth in emerging markets including China propped up revenue in the first quarter as U.S. demand waned. Yum! Brands Inc., the owner of the KFC chain, said sales in the Asian nation drove its 31 percent profit surge.
France's Carrefour SA, targeted by Chinese protesters after the Olympic torch relay was disrupted in Paris, may add 20 supermarkets in China this year, newspaper Journal du Dimanche reported last month.
China's economy expanded 10.6 percent in the first quarter from a year earlier, down from 11.9 percent pace for all of 2007. Export growth slowed in the first four months of this year from the 2007 pace as world economies cooled.
Outpacing U.S.
China's retail sales rose 16.8 percent last year, four times the U.S. growth rate of 4.2 percent.
The government is increasing minimum wages, expanding health care and subsidizing farmers' purchases of televisions and refrigerators to boost consumption and lower savings rates.
China's savings rate as a proportion of gross domestic product climbed over the past five years to about 51 percent from about 40 percent, according to a May 5 report by Jonathan Anderson, an economist with UBS AG.
In his May 10 speech, Zhou acknowledged conflicts between the government targets of boosting consumption and preventing the world's fastest-growing major economy from overheating.
"On the one hand, we need to boost consumption to adjust the economic growth structure, but on the other hand we also need to prevent excessive demand from fueling inflation,'' the central banker said.
Bank Reserve Requirement
The bank's efforts to prevent overheating are focused on cooling lending growth that is fueling investment. The People's Bank of China yesterday raised the proportion of deposits that banks are required to set aside as reserves to a record 16.5 percent to stem the amount of money available for lending.
Rising incomes will help to counter the effects of surging prices, stock market declines, and the scrapping of a seven-day May holiday, State Information Center economists led by Fan Jianping said in a report published this month.
The benchmark CSI 300 Index of stocks has tumbled 28 percent this year.
Urban disposable incomes climbed 11.5 percent in the first quarter from a year earlier to 4,386 yuan ($627). Rural earnings rose 18.5 percent to 1,494 yuan.
Bloomberg's retail sales data began in 1999.
Sales rose 22 percent to a record 814.2 billion yuan ($116 billion) in April after gaining 21.5 percent in March, the statistics bureau said today. That was more than the 21 percent median estimate of 27 economists surveyed by Bloomberg News.
China needs to save less and boost consumption to rebalance an economy skewed toward investment and overseas sales, central bank Governor Zhou Xiaochuan said May 10. The 27 percent jump in sales of household electronics was a boost for Suning Appliance Co., a home-appliance retailer planning to sell new shares to fund the opening of 250 stores.
"China's retail sales will keep growing strongly,'' said Sumei Tang, a Sydney-based economist at Moody's Economy.com. "Incomes are growing rapidly and the government is very keen to stimulate consumer demand to help offset weaker export growth.''
The yuan traded at 6.9872 versus the dollar as of 3:17 p.m. in Shanghai after closing yesterday at 6.9882.
The sales figures are swelled by inflation close to the fastest pace since 1996. Consumer prices climbed 8.5 percent in April from a year earlier as food costs soared.
The earthquake yesterday that killed almost 10,000 people may further fuel inflationary expectations in some parts of China by disrupting supplies, Ting Lu and T.J. Bond, economists at Merrill Lynch & Co. in Hong Kong, said in a note.
Petrol, Jewelry, Grain
Petroleum sales climbed 45 percent in April, jewelry rose 41 percent, and grain and cooking oil jumped 36 percent, today's report showed.
L'Oreal SA, the world's biggest cosmetics maker, said last month that growth in emerging markets including China propped up revenue in the first quarter as U.S. demand waned. Yum! Brands Inc., the owner of the KFC chain, said sales in the Asian nation drove its 31 percent profit surge.
France's Carrefour SA, targeted by Chinese protesters after the Olympic torch relay was disrupted in Paris, may add 20 supermarkets in China this year, newspaper Journal du Dimanche reported last month.
China's economy expanded 10.6 percent in the first quarter from a year earlier, down from 11.9 percent pace for all of 2007. Export growth slowed in the first four months of this year from the 2007 pace as world economies cooled.
Outpacing U.S.
China's retail sales rose 16.8 percent last year, four times the U.S. growth rate of 4.2 percent.
The government is increasing minimum wages, expanding health care and subsidizing farmers' purchases of televisions and refrigerators to boost consumption and lower savings rates.
China's savings rate as a proportion of gross domestic product climbed over the past five years to about 51 percent from about 40 percent, according to a May 5 report by Jonathan Anderson, an economist with UBS AG.
In his May 10 speech, Zhou acknowledged conflicts between the government targets of boosting consumption and preventing the world's fastest-growing major economy from overheating.
"On the one hand, we need to boost consumption to adjust the economic growth structure, but on the other hand we also need to prevent excessive demand from fueling inflation,'' the central banker said.
Bank Reserve Requirement
The bank's efforts to prevent overheating are focused on cooling lending growth that is fueling investment. The People's Bank of China yesterday raised the proportion of deposits that banks are required to set aside as reserves to a record 16.5 percent to stem the amount of money available for lending.
Rising incomes will help to counter the effects of surging prices, stock market declines, and the scrapping of a seven-day May holiday, State Information Center economists led by Fan Jianping said in a report published this month.
The benchmark CSI 300 Index of stocks has tumbled 28 percent this year.
Urban disposable incomes climbed 11.5 percent in the first quarter from a year earlier to 4,386 yuan ($627). Rural earnings rose 18.5 percent to 1,494 yuan.
Bloomberg's retail sales data began in 1999.
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