China’s retail sales projected to grow 8% in 2021: economist
China’s retail sales projected to grow 8% in 2021
Published: Oct 19, 2020 07:08 PM

A consumer buys drinks at a supermarket in Haizhou District of Lianyungang City, east China's Jiangsu Province, Aug. 10, 2020. (Photo by Geng Yuhe/Xinhua)

China's retail sales shrank 7.2 percent between January and September under the impact of the coronavirus pandemic, but economists said that domestic consumers' steady confidence in the nation's stable and bright economic prospects is expected to propel retail sales to 8 percent growth in 2021.

In the first three quarters of this year, retail sales totaled 27.33 trillion yuan ($4.08 trillion), data from the National Bureau of Statistics (NBS) showed on Monday. 

However, retail sales recorded growth for the second straight month in September at 3.3 percent to reach 3.53 trillion yuan, after returning to expansion in August for the first time this year, the NBS data showed.

Judging by the ongoing recovery, retail sales are clearly emerging from the shock of the coronavirus outbreak, an official with the NBS said on Monday.

Third-quarter GDP growth of 4.9 percent saw the world's second-largest economy bounce back to an expansion of 0.7 percent in the first three quarters.

NBS spokesperson Liu Aihua said that the consumption recovery has maintained sound momentum, citing strong spending during the National Day and Mid-Autumn Festival holidays earlier this month, the growing revenues of the catering industry, and robust online sales.

"Retail sales have for the past several months showed good mo-mentum, demonstrating a recovery and posting positive growth for both August and September," she said.

 Liu said the rebound in retail is underlined by recovering brick-and-mortar shop sales, a recovery in services spending (including catering and accommodation), and a rebound in sales of big-ticket items such as jewelry, cars and cosmetics.

A continued recovery in retail sales and overall consumption in China's enormous market is of great benefit to the economy, which is in the process of building a new development pattern of "dual circulation" that aims to release the great potential of the domestic market as well as boost the recovery of the world economy, experts noted.

"Consumption growth is more resilient compared with exports and investment, and COVID-19's impact won't impede growth in domestic consumption for too long," said Cong Yi, a professor at the Tianjin University of Finance and Economics. 

As the world's second-largest consumption market, whose con-sumption sector became the major driver of economic growth for the past six years, the contribution of consumption to China's economic growth has continued to improve. 

China's retail sales increased from 33.2 trillion yuan in 2016 to 41.2 trillion yuan in 2019, about 60 percent of GDP.

Liu said that the country will step up efforts to raise consumers' incomes and improve the consumption environment.

Cao Heping, professor at the School of Economics of Peking University, told the Global Times on Monday that the virus outbreak in China lasted less than three months and therefore consumers' confidence wasn't severely harmed. 

"Domestic consumption is expected to return to normal growth by the end of this year, with the upcoming Double 11 shopping spree estimated to post over 1 trillion in sales," Cao said. He projected that China's retail sales growth may rebound to 8 percent next year, while its GDP growth may reach as much as 10 percent, given the low base this year.

New business models such as online learning, internet health and live-streaming sales will lead China's consumption to swiftly expand, he said.

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