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

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China’s retail sales in October

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.

Components of retail sales

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.

Performance of various ETFs

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.

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