Chinese language - Retail sales rose 13.4% on incomes

CHINA / National

Retail sales rose 13.4% on incomes
(Bloomberg)
Updated: 2006-05-15 08:46

China's retail sales probably grew at close to the fastest pace in a year
in April as rising incomes left consumers with more to spend.

Sales rose 13.4 percent from a year earlier after gaining 13.5 percent in
March, according to the median forecast of 21 economists surveyed by
Bloomberg News. The Beijing-based National Bureau of Statistics will
release April figures at 10 am local time Monday.

Premier Wen Jiabao has cut taxes and raised minimum wages in a bid to
encourage consumer spending and make economic growth less tilted toward
investment and exports. Increasing affluence among China's 1.3 billion
citizens is luring overseas companies such as Best Buy Co., the largest
US electronics retailer.

"China is trying to reduce the pressure on rapid investment growth by
increasing consumption," said Tim Condon, an economist at ING Bank in
Singapore. "We expect retail sales this year will grow faster" than in
2005.

March's increase was the biggest in a year, adjusting for distortions
caused by the weeklong Lunar New Year holiday, which fell in January this
year and in February in 2005. Sales growth peaked at 17.8 percent in May
2004, then cooled as the government introduced curbs on lending and
investment.

Per capita disposable incomes in towns and cities increased 10.8 percent
in the first quarter, while rural incomes jumped 11.5 percent, an April
20 report showed. The economy expanded 10.2 percent in the first quarter,
more than any other major economy.

Best Buy on May 12 said it agreed to invest $180 million for majority
control of China's Five Star Appliance, giving the U.S. company 136
outlets in eight provinces. Overseas retailers such as Wal-Mart Stores
Inc. and Carrefour SA are also expanding their store networks in China.

Increased spending has benefited retailers such as Gome Electrical
Appliances Holdings Ltd. Gome, China's largest home-appliance retailer,
last week said sales jumped 68 percent in the first quarter.

The following table shows economists' forecasts for percentage changes in
China's retail sales in April from a year earlier.

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