May 13 – The country’s retail sales of local consumer goods increased by 22 percent to RMB814.2 billion (US$116 billion) for April; the strongest gains since 1999, according to sources.

The National Bureau of Statistics reports that for the first four months of the year, China’s retail sales of consumer goods reached RMB3.37 trillion. The figure is an increase of 21 percent compared to the same period last year.

The latest numbers hint that local consumption could cushion China against declining exports. For the first four months of the year, export growth slowed to 22 percent compared to last year’s 26 percent.

Central bank Governor Zhou Xiaochuan told Bloomberg that the country needs to save less and raise consumption to rebalance an economy reliant on investment and overseas sales.

“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,” Zhou said.

The statistics bureau said that the figures were affected by inflation and the fact that consumer prices rose by 8.5 percent in April because of higher food costs.

“China’s retail sales will keep growing strongly,” Sumei Tang, a Sydney-based economist at Moody’s Economy.com, told Bloomberg. “Incomes are growing rapidly and the government is very keen to stimulate consumer demand to help offset weaker export growth.”

In April, petroleum sales increased by 45 percent, jewelry by 41 percent, and grain and cooking oil by 36 percent.

This entry was posted on Tuesday, May 13th, 2008 at 4:14 pm and is filed under Economy & Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.