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China Posted 21.6% Hike in Retail Sales in May 2008
Aug 08, 2008

Retail sales in China surged 21.6% in May 2008 on the back of rising consumer spending, high economic growth, and government’s efforts to encourage people for spending more.

According to the National Bureau of Statistics (NBS), retail sales in China rose by 21.6% in May this year, close to the fastest growth in the last nine years and following 22% growth recorded in April 2008, against the same month a year ago, as reported by
Market Watch.

NBS also provided sales figures for the Chinese retail market in May 2008 at 870.4 Billion Yuan ($126 Billion). In May 2008, the sales of edible oil and grain surged by 27.6%, that of automobiles and auto components by 32%, eggs and meat by 25.4%, jewelry by 29.4%, and oil and related products by 42.5%. Construction material also recorded a sales rise of 9.3% in May 2008 against the same month last year.

The biggest boost to the Chinese retail sector in May 2008 was given by strong consumer spending supported by rising incomes and government policies to keep economy free from investment and export. The authorities in Beijing have been working for many years to devise policies that encourage people for spending instead of saving. Consequently, the higher wages are strongly backing the country’s economic strength amidst slowdown in the global economy.

Moreover, the State Council said that China faced one of the deadliest earthquakes in the last 32 years and the survivors were provided with 1.1 Million quilts, 14 Million clothing pieces and 4.8 Million beds. Thus, the Chinese retail sales surged with an increment in demand for essential items. Furthermore, the demand for construction material significantly rose to commence the rehabilitation work in the earthquake-affected zone, which, in turn, pushed up retail sales in the country.

However, the rising inflation and skyrocketing fuel prices could hit the economic conditions of the country. Chinese people are finding it extremely hard to manage their household budget due to inflation owing to credit crisis.

A Senior Research Analyst at
RNCOS said, “The Chinese retail industry grew at a rapid pace in May 2008 due to high demand for consumer products. Furthermore, the government efforts to soften prices of consumer goods by taming inflation will also help to continue the current growth trend in retail sales. In addition, Beijing 2008 Olympic Games will also boost retail sales in China as there will be a huge turnout of tourists and games lovers.”

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Booming Retail Sector in India