More signs China’s growth is slowing

Sales by China’s retail businesses during the lunar new year holiday rose 8.5% 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, said retail and catering enterprises had revenue of more than 1-trillion yuan ($148.3bn) between February 4 and 10 during the holiday.

It attributed the increase to stronger sales of gifts, traditional foods, electronic products and speciality 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% in 2018 — the weakest pace in 28 years — and is expected to cool further in 2019 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% and the consumer staple index surged 4%. Liquor maker Kweichow Moutai jumped nearly 5% while home appliance makers Gree Electric Appliances and Midea Group closed up 2.7% and 4.1%, respectively.

But the growth rate for holiday retail sales fell to its lowest since at least 2011. During the 2018 lunar new year holidays, the annual increase was 10.2%.

Nomura analysts said the fresh data indicate how consumers are 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% on the year, with the number of trips rising 7.6% to 415million, the official Xinhua news agency said on Sunday.