Buoyed by rising incomes and prices, China’s retail sales rose at the fastest pace in last eight years touching 18.1 per cent increase in October from a year earlier to US$111 billion topping the 17 per cent growth in September, government data showed.
It was the biggest gain since 1999, when the government started releasing the data. The median forecast of 21 economists was for unchanged growth.
Sales of clothes, electronics and automobiles jumped more than 30 percent, lifting revenue for Wal-Mart Stores Inc., the world’s biggest retailer, and SAIC Motor Co., China’s largest carmaker. Rising consumer spending also is fueling inflation that accelerated last month to 6.5 percent on food shortages.
“This growth has a lot to do with inflation but demand is also strong,” said Chen Xingdong, chief China economist at BNP Paribas SA in Beijing. “Looking ahead, consumption should keep improving and that will be accompanied by inflation — you can’t expect to only have good things.”
Sales of meat, poultry, eggs, grain and edible oil surged more than 45 percent in October from a year earlier. Spending on clothing and shoes jumped 33 percent. Automobile sales climbed 36 percent. For household electronics, the gain was 31 percent.
“Inflation played a major role in increasing retail sales in recent months,” said Henry Li, an economist at Core Pacific- Yamaichi International Ltd. in Hong Kong.
Li estimated inflation contributed about a quarter of the increase in retail sales, mainly because of higher food costs. October’s rise in consumer prices from a year earlier matched August’s decade high of 6.5 percent. Consumer prices for non-food goods increased only 1.1 percent last month from a year earlier.
Wal-Mart seeks to tap rising consumer wealth in an economy that’s expanded by more than 11 percent for three straight quarters. China revenue rose 45 percent in the third quarter from a year earlier as the company added six stores, Wal-Mart said.
Marks & Spencer Group Plc, the largest clothing retailer in the U.K., plans to open its first stores in Beijing and Shanghai next year
