Boost for China’s retail sector

– Sales by China’s retail businesses during the Lunar New Year holiday rose 8.5% from a year earlier, pushing up consumer stocks yesterday, 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 one trillion yuan (R2 trillion) between February 4 and 10 during the holiday. It attributed the increase to stronger sales of new year gifts, traditional foods, electronic and speciality products.

The holiday is considered a barometer for Chinese private consumption as it is the time for family reunions.

China’s economic growth slowed to 6.6% last year – the weakest in 28 years – and is set to cool further this year before government growth boosting measures stabilise activity from mid-year. Yesterday, 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 2011. During last year’s Lunar New Year holidays, the yearly increase was 10.2%.

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. –