China retail sales edge up as officials eye consumption boost
A worker carries a box of supplies for a Mixue store in Jakarta, Indonesia. (AP Photo/Achmad Ibrahim)
BEIJING, China – Retail sales in China accelerated slightly in the first two months of the year, government data showed Monday, as officials in the world’s second-largest economy push to boost flagging spending.
Beijing has in recent months been looking to revive consumer confidence in the economy, beset by persistent property sector woes and now under increasing pressure from fresh trade tensions with the United States.
READ: China-US trade war heats up with Beijing’s tariffs to take effect
But data on Monday from Beijing’s National Bureau of Statistics (NBS) offered some positive signs, showing retail sales — a key measure of consumer sentiment — increased four percent year-on-year during January and February combined.
“Generally speaking, in the first two months, with the sustained effects of macro policies, the national economy maintained the new and positive development,” the NBS said in a statement.
But, the statement warned, “domestic effective demand is weak, (and) some enterprises face difficulties in production and operation”.
“The foundation for sustained economic recovery and growth is not strong enough,” it said.
Industrial production in January and February increased 5.9 percent year-on-year, data showed, slowing from the 6.2 percent growth in December.
China’s statistics authorities combine many economic indicators for the first two months of the year to account for potential distortions caused by the annual Lunar New Year holiday.
Meanwhile, the surveyed urban unemployment rate — China’s main metric for measuring unemployment — in February ticked up to 5.4 percent, the NBS said, up 0.2 percentage points from the previous month.
Beijing announced earlier this month that it is targeting total growth this year of five percent — the same as last year and a goal considered ambitious by many economists.
Faced with an intensified trade war under US President Donald Trump, Chinese officials are now under pressure to boost domestic consumption to reduce reliance on exports.
The government on Sunday released an action plan it hopes can overcome low consumer demand, including measures such as property reform and childcare subsidies.
“The macro data released today show mixed messages,” wrote Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
Activity data on industrial production and retail sales showed “consistent signals and beat expectations”, wrote Zhang.
But unemployment “rose unexpectedly to the highest level in two years”, he added.
“The risk to the economy is the damage from higher US tariffs on China’s exports which will likely show up in the trade data over the next few months,” wrote Zhang.
