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China – Retail Sales Observes 15% Growth in Q1 2009
Jun 02, 2009

China’s retail sales saw a YOY increase of 15% in Q1 2009, largely due to the government’s stimulus plan as well as the Spring Festival’s annual holiday.

The National Bureau of Statistics revealed that China’s retail sales had hit the mark of CNY2.94 Trillion ($430.6 Billion) in Q1 2009, representing a YOY increase of 15%, as reported by China Retail News.

As far as regional sales are concerned, urban areas saw YOY increase of 14.1%, while rural areas posted growth of 17%. In terms of industry, wholesale and retail sales reached CNY2.463 Trillion ($360.6 Billion), witnessing a YOY increase of 14.6%; sales of hotel and catering sector stood at CNY438.3 Billion ($70.76 Billion), a YOY growth of 18.9%; and the other industries sales were CNY38.8 Billion ($5.68 Billion), a 2.8% YOY increase. 

By products, the sales of foodstuff surged by 12.4% while that of clothing and utilized commodities grew by 14.3% and 7.3% respectively. Monthly analysis shows that the growth in retail sales declined from 18.5% in January 2009 to 15.2% in February and to 14.7% in March 2009.

The growing retail sales in China indicate to the positive impact of central government’s stimulus package. Subsidies for low income sections and farmers have been increased by the government in an attempt to improve the social welfare structure to enhance the domestic consumption. This gave a boost to the Chinese retail sector.

Another major factor that spurred the retail sales was the Spring Festival commenced in January 2009. This is a period of long annual holiday in China and is usually a shopping time in the country. 

Industry experts have expressed their hope in China’s consumption as well as sales pattern and said that the retail consumption would maintain strong growth in future, driven by increase in the incomes of the Chinese citizens and growing household savings. Growth of 11.2% and 8.6% in urban and rural income during Q1 2009 points to the sustainable growth trend.

According to a Research Analyst at RNCOS, “The growth in retail sales during Q1 2009 was much better than expected. Moreover, the rolling out of fiscal stimulus package by the Chinese government is expected to boost demand for a wide range of products, which will raise the production level in the upcoming months.”

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