China: Retail sales return to growth in August
Retail sales rose 0.5% compared to the same month of the previous year in August, which contrasted July’s 1.1% decrease. The result marked the strongest rise since December 2019 and beat the flat reading expected by market analysts.
On a monthly basis, retail sales grew 1.2% in seasonally-adjusted terms in August, which was better than July’s 0.6% expansion and marked the best result since March 2013. Meanwhile, the trend pointed down, with the annual average variation of retail sales coming in at minus 3.2% in August, down from July’s minus 2.6%.
The rebound in retails sales reflected the underlying strength of the Chinese economy. In this regard, Iris Pang, chief economist for Greater China at ING, noted that:
“Since the introduction of cross-provincial travel within China, we have seen retail sales recovering strongly to 0.5%YoY growth in August from -1.1%YoY a month ago. Spending on cosmetics and jewellery rose 19.0%YoY and 15.3%YoY, respectively in August. The tourism business has also brought back jobs in the service sector. The spending power of the population has improved.”