China’s Retail Sales Fell Last Week: Will That Affect Growth?

According to a report provided by the National Bureau of Statistics of China, on a yearly basis, China’s retail sales rose 10% in October compared to a 10.3% rise in September 2017. It didn’t meet the market expectation of a 10.4% rise.

Growth in retail sales has weakened since February 2017. Weaker October retail sales were mainly due to the following:

• On a yearly basis, sales for oil and oil products rose 8.2% in October 2017 compared to an 8.5% rise in September 2017.
• Automobiles sales rose 6.9% in October 2017 compared to a 7.9% rise in September 2017.
• Building materials sales rose 6.1% in October 2017 compared to a 9.5% rise in September 2017.
• Furniture sales rose 10% in October 2017 compared to a 15.5% rise in September 2017.

Major components of retail sales showed weaker figures in October. Overall sales growth was also weaker that month. However, sales increased at a higher rate for cosmetics and office supplies. Falling retail sales is a major concern for the country since it shows that consumer activity is declining.

The iShares MSCI China ETF (MCHI), which tracks the performance of China (YINN) (FXI), rose 3.5% in October 2017. The Deutsche X-trackers CSI300 China A (ASHR), which tracks the performance of China’s A shares, rose 4.8% in October 2017.

In the next part of this series, we’ll analyze the performance of US retail sales in October 2017.