China's retail sales grew 21.6 percent in 2008, although growth decelerated during the second half amid the economic downturn, the National Bureau of Statistics (NBS) said Thursday.
The full-year growth rate was 4.8 percentage points higher than in 2007 but down from 21.9 percent for the January-to-November period.
As consumer sentiment weakened and inflation eased, year-on-year retail sales growth decelerated continuously during the second half, down from 23.3 percent in July to 20.8 percent in November and further to 19 percent in December.
A government economist who asked not to be identified told Xinhua that the inflation-adjusted 2008 growth was "fairly good".
He said faster growth in the early months of the year partly reflected a higher rate of inflation. The NBS said the inflation rate eased for the eighth consecutive month in December to 1.2 percent, from a 12-year high of 8.7 percent in February.
Zuo Xiaolei, chief economist with Beijing-based Galaxy Securities, agreed with the economist's view. She said real retail sales growth had been "stable" or even accelerating.
NBS spokesman Ma Jiantang said real (inflation-adjusted) retail sales growth was 17.4 percent in December, or 0.8 percentage point more than in November.
Ma cited the December sales data as an indication of positive economic change. Other factors included an acceleration in industrial output and a strong rebound in money supply.
"Domestic sales growth remained relatively fast and consumption in urban and rural areas remained robust," Ma told a press conference here.
Peng Wensheng, head of China Research at Barclays Capital, also noted that year-on-year retail sales growth had been "surprisingly resilient" in the face of a sharp slowdown in overall economic growth.
He attributed the strength in retail sales to the government's efforts to raise rural incomes and expand social security coverage over the past couple of years.
But he also said the continued fast growth could be a result of the "carry-over effect" of strong growth in the earlier months of the year.
Growth to weaken
The government economist also warned of the negative effects of the domestic and global economic slowdown on consumer spending, such as job losses and declining incomes.
"A pick-up in sales growth seems unlikely this year, and growth may continue to decelerate," he said, adding that it could take a long time before the government's economic stimulus package began to increase consumer spending.
Peng agreed with that assessment, saying that rising unemployment and slower income growth are likely to further constrain consumption growth in the near future.
China has sought to boost domestic spending to counteract weakening exports. The steps it has taken include two fuel price cuts in a month, cuts in vehicle sales taxes and improving the rural distribution network. It has also offered subsidies for farmers to purchase home appliances.
The government economist said such moves could help boost consumer spending, but it would take time before they were effective. He forecast a turnaround in retail sales growth by 2010.
He urged the government to outline long-term policies that could boost consumption, and he said the government should spend more on medical and social security services to encourage consumer spending.
The NBS said that full-year retail sales in 2008 reached 10.85 trillion yuan (US$1.59 trillion).
Urban sales of consumer goods expanded 22.1 percent to 7.37 trillion yuan, while sales in rural areas increased 20.7 percent to 3.48 trillion yuan, according to the NBS.
In the meantime, annual per capita urban incomes grew 14.5 percent to 15,781 yuan. The figure for rural residents was up 15 percent to 4,761 yuan. In real terms, the growth rate was 8.4 percent for urban residents and 8 percent for rural residents.
(Xinhua News Agency January 22, 2009)