China Nov retail sales growth weakest in 15 years

20, Dec. 2018

TOKYO, NNA – China’s retail sales in November grew at the slowest pace in over 15 years due largely to a plunge in new vehicle sales and falling prices of petroleum products.

November sales rose 8.1 percent from a year earlier to 3.53 trillion yuan ($512 billion), the lowest rise since May 2003 when growth was 4.3 percent, according to National Bureau of Statistics data.

The figure for the period January to November was up 9.1 percent from the previous year to 34.5 trillion yuan, the data shows.

New car sales in November were down 13.9 percent on the year to 2,547,800 units, according to the China Association of Automobile Manufacturers. New sales are expected to suffer their first decline this year since 1990, Chinese media report.

The slowdown is mainly attributed to the expiry of a tax cut on small vehicles at the end of last year, Yusuke Miura, senior economist at Mizuho Research Institute, told NNA.

Lower prices on petroleum products are also affecting goods prices, he added.

China’s retail sales have seen robust growth for over 15 years, rising year-on-year in a range of 10 percent to more than 20 percent in a growing economy where incomes are rising and workers are increasingly in short supply, Miura said.

Lukewarm domestic retail sales are expected to continue for one or two years after the end of the tax credit, he said.

In the short term, the U.S.-China trade row will also weigh on private consumption as it curbs Chinese exports and weakens demand for workers, Miura added.