China Sales Slow in November, but Still Booming
Dec 16, 2002
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China reported that retail sales growth slowed in November but remained strong as consumers snapped up big-ticket items like homes and cars, keeping the economy on track to hit 8-percent growth for the year.
Fixed asset investment, which covers spending on things like roads and real estate, also slowed in November due to what analysts said was probably an easing of state stimulus projects.
Retail sales, an important part of the economy along with exports and investment, rose 9.1 percent in November, one of the highest paces all year, the State Statistical Bureau said.
Sales climbed 8.8 percent year-on-year in the first 11 months, shy of the government's 9-percent target.
"Retail sales are still pretty much on track in terms of the momentum that we've seen all year, but I'm wondering if this can be sustained," said Tai Hui, an economist with Standard Chartered Bank in Hong Kong.
The government, trying to boost domestic consumption to prop up economic growth and fight mild deflation, has raised the pay of civil servants and set longer national holidays.
But market-oriented reforms are throwing millions of state workers out of jobs, making consumers jittery, and many are saving because of the uncertain outlook.
"There's not only the unemployment issue, but these figures include goods and not services, so as you have a shift in consumption, I wonder if actual consumer spending will be captured," Hui said.
Still, November's sales rise of 9.1 percent matched growth in September and was the third-highest rate after October's 9.4 percent rise and May's 9.3 percent.
"Purchases of housing, cars and other high-end consumer products that improve quality of life continued to speed up, and had a noticeable stimulus effect on the market," the statistics bureau said in a statement.
China's economy grew 7.9 percent in the first three quarters, and the statistics bureau has forecast full-year growth will hit at least 8 percent, above a 7-percent target.
"The star performers are exports and the investment sector. In 2003, exports should hold up well, but that depends on the global economy and other international factors," Hui said. "Domestic demand I expect to hold up as well. Investment may see some moderation, but consumer spending will keep the economy in good shape."
Home-buying added to the strong November sales. Housing sales jumped by 81 percent in the month, which in turn triggered a 20-percent rise in sales of home appliances.
Analysts said China's strong overall economic performance may have convinced the government it no longer needs to spend heavily to prop up growth. (AP)
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