Increasing retail sales in 2017
China’s retail sales rose 10.9% year-over-year in 1Q17, which was lower than its 1Q16 retail sales. The country’s March 2017 retail sales exceeded the analysts’ forecast of 9.6%. The chart below shows the retail sales over the last year.
Retail sector performance
Retail sales of consumer goods totaled 8.5 trillion yuan (~$1.3 trillion) in 1Q17, according to the National Bureau of Statistics. The total sales of consumer goods increased to 10.9% year-over-year in March 2017, covering areas such as:
- high demand in rural areas, with retail sales increasing 11.9% year-over-year
- retail sales in urban areas with 9.7% year-over-year growth
- online sales with 32.1% growth in the first two months of 2017
Consumer spending is increasingly important to the Chinese economy, considering its transition to a demand-driven economy (FXI) (YINN) (ASHR). China is currently focusing on the growth model, which is driven by consumer spending, as well as moving its focus from exports and investments.
This consumption contributed 64.6% to China’s GDP growth in 2016 and is considered the main driver of economic growth in 2017. The Global X China Consumer ETF (CHIQ) and the PowerShares Golden Dragon China ETF (PGJ) have major allocations to the consumer discretionary sector. In 1Q17, CHIQ and PGJ gained about 17% and 18%, respectively.
In the final article in this series, we’ll look at China’s exports.