China’s Lunar New Year retail sales rise
SHANGHAI: Sales by China’s retail businesses during the Lunar New Year holiday rose 8.5 per cent from a year earlier, pushing up consumer stocks on Monday, but a cooler pace of growth added to evidence the economy is slowing.
The Ministry of Commerce, in a notice on its website late on Sunday, said retail and catering enterprises had revenue of over 1 trillion yuan ($148.3 billion) between February 4-10 during the holiday.
It attributed the increase to stronger sales of new-year gifts, traditional foods, electronic products and specialty products.
The holiday is considered a barometer for Chinese private consumption as it is the time for family reunions as well as giftgiving.
China’s economic growth slowed to 6.6 per cent in 2018 — the weakest pace in 28 years — and is expected to cool further this year before government growth boosting measures stabilise activity from mid-year.
On Monday, when China’s financial markets reopened, the blue-chip index rose 1.8 per cent, and the consumer staple index surged 4 per cent. Liquor maker Kweichow Moutai Co Ltd jumped nearly 5 per cent while home appliance makers Gree Electric Appliances and Midea Group closed up 2.7 and 4.1 per cent, respectively.
But the growth rate for holiday retail sales fell to its lowest since at least 2011. During the 2018’s Lunar New Year holidays, the annual increase was 10.2 per cent.
Nomura analysts said the fresh data indicated how consumers were further tightening their belts, and noted that it was the first time Lunar New Year retail sales recorded single-digit growth since the government started publishing data in 2005.
“Weak consumption during the Lunar New Year holidays in 2019 does not bode well for overall retail sales growth,” Nomura said in a note on Monday. Domestic tourism during the new year break generated revenue of 513.9 billion yuan, up 8.2 per cent on the year, with the number of trips rising 7.6 per cent to 415 million, the official Xinhua news agency said on Sunday.
Domestic consumers were the main engine behind China’s economic expansion last year as other growth drivers such as manufacturing and trade faltered, but their spending has already showed signs of softening.