The August report from China’s National Bureau of Statistics shows retail sales growth for the first time in 2020. It is the first positive result for the entire year, which may be one of the signs that the nation is beginning to emerge from the pandemic crisis.
According to the report, the volume of retail sales in August increased by 0.5% compared to the same period last year. While some areas showed significant growth, sales of communication equipment increased by 25.1% and car sales by 11.8%.
At the same time, retail sales for the first eight months of the year showed a decrease of 8.6% compared to 2019. However, this did not apply to online sales. Here the opposite trend was observed – in the first eight months of the year, the volume of Internet sales increased by 15.8%.
The report also showed that the volume of industrial production in China in August increased by 5.6% compared to last year. Economic indicators’ growth allows the government to make cautious optimistic forecasts for the third and fourth quarters of the year.
However, economists urge that this is not a matter of rapid improvement. Economic activity growth is mostly due to the implementation of deferred demand, which buyers implemented during the quarantine months. This factor will no longer actively drive retail sales in the coming months. Also, the constraining factors are the fact that the demand for medical products, which are exported in large quantities, is declining. Besides, many quarantine measures are likely to be extended until the end of the year. The Chinese economy may also be negatively affected by strained relations with the United States.
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