Chinese retail sales last month increased for the first time since the COVID-19 pandemic struck, data showed yesterday, as officials try to restart the crucial domestic consumer sector to fuel recovery in the world’s No. 2 economy.
Spending had previously remained sluggish, despite China bringing the virus largely under control, with shoppers still cautious owing to global uncertainty — but economists believe the latest data indicate that recovery is on a firmer footing.
The key indicator of consumer sentiment last month rose 0.5 percent year-on-year, whereas a poll of analysts by Bloomberg News had forecast no growth.
Photo: EPA-EFE
Beijing has ramped up initiatives such as shopping festivals and voucher campaigns to spur consumer spending.
The latest reading is an improvement on the 1.1 percent drop seen in July and much better than the 20.5 percent plunge suffered in January and February when millions of people were put into lockdown to prevent the virus from spreading.
With external demand expected to remain weak as China’s major trading partners struggle to contain the disease, China has redoubled efforts to encourage its exporters to target its vast local market instead.
The recovery is “on a reasonably firm footing now ... with solid investment growth, gradually recovering consumption momentum and resilient exports,” Oxford Economics economist Louis Kuijs said.
Industrial output, which has recovered more quickly than retail, strengthened further, rising 5.6 percent, which also beat forecasts and improved on July’s 4.8 percent increase.
With fiscal spending set to be ramped up and a revival in consumer confidence, China’s economy is on track to return to its pre-virus growth rate before the end of the year, Julian Evans-Pritchard of Capital Economics said.
China’s economy has a “sustained steady recovery,” Chinese National Bureau of Statistics spokesman Fu Linghui (傅令輝) told reporters yesterday.
However, Fu said that with “mounting uncertainties” internationally and “pronounced domestic structural problems, there remains huge pressure to keep employment and businesses stable, and to safeguard people’s livelihoods.”
The urban unemployment rate, a cause for concern given China’s large number of fresh graduates, edged down to 5.6 percent.
Analysts have said that the real level of unemployment is likely higher than official numbers suggest, with smaller businesses hit hard by the virus fallout.
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