Chinese Retailers Grew Significantly in Jan 09

Due to the government’s stimulus policies, launched since fourth quarter of 2008, major Chinese retailers saw a significant increase in sales in January 2009.

Yao Jian, Spokesman of the Ministry of Commerce in Beijing, stated that major retailers in China witnessed 24.5% growth in sales during January 2009 as compared to January 2008, as reported by chinanewswire.

Domestic consumption of food, alcohol and cigarettes, and jewelry rose significantly. Sales in the aforesaid categories witnessed YOY growth of 28.9%, 47.2% and 29.2% respectively in January 2009. Passenger cars sales surged 4.4% in the same month from December 2008, reaching 735,500 Units mainly due to recent tax cuts. Earlier, the retail sales registered YOY increase of 7% in October 2008, 9.9% in November 2008 and 4.9% in December 2008.

The upsurge in Chinese retail sales during January 2009 was primarily due to the stimulus policies launched by the government since Q4 2008. Moreover, consumption in tertiary industries, including culture, education, tourism, and telecommunications, is boosted by the week-long Lunar New Year holiday which commenced on January 25, 2009.

Higher spending in tertiary spending indicated to the improvement in consumption structure as well as in the living standard of people. Moreover, there are no signs that the Chinese banks facing bankruptcy. All the banks are benefited from the support given by the Communist Party to increase the liquidity and to stabilize them.

Moreover, private consumption remained strong during the period. However, in view of sluggish growth of real urban income, consumer spending is likely to slow down in 2009, but private consumption would certainly remain the key driver of the overall growth in Chinese economy. 

According to a Research Analyst at RNCOS, “The growth in retail sales during January 2009 indicates sliding property prices. Sluggish economic growth has so far been able to post very negligible impact upon the spending habits of Chinese. However the present momentum of the Chinese retail sales is expected to slowdown in coming months, but the government’s initiatives to stimulate the country’s economy may help against dramatic decline.”

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