China’s consumption further consolidated in the first half of this year as domestic demand firmed up while restrictions hampering travel and buying activities were gradually removed, which helped modify consumers’ buying habits in the aftermath of the initial outbreaks of the COVID-19 epidemic, experts said.
Data released by the National Bureau of Statistics on July 15 showed that China’s retail sales of consumer goods jumped 23 percent year-on-year in the first half of this year, with two-year average growth standing at 4.4 percent, 0.2 percentage point higher than that in the first quarter.
In the second quarter, retail sales climbed by 13.9 percent year-on-year, bringing the average growth for the past two years to 4.6 percent.
The figure went up by 12.1 percent in June from a year earlier, and was 10 percent higher compared with June 2019.
China’s catering sector, which was severely affected by the COVID-19 epidemic, saw its combined first-half revenue jump 48.6 percent year-on-year. In June, retail in catering went up by 20.2 percent year-on-year while retail in goods went up by 11.2 percent.
Wen Bin, chief researcher at China Minsheng Bank, said that overall consumption signals a moderate uptrend.
He said that with the impact of the COVID-19 gradually tapering off, restrictions hampering offline consumption have mostly been removed.
Yet, he noted that the NBS announcement on July 15 showed tourism revenue has merely returned to about three fourth of the pre-COVID-19 level.
“This indicates that the COVID-19 situation may have changed people’s habits of consumption, and it is of crucial importance to improve people’s willingness and capacity in buying,” he said.
Growth of different types of retail activities is also diverging. Online retail sales surged 23.2 percent year-on-year in the first half, putting the two-year average growth at 15 percent.
Li Qilin, chief economist at Shanghai-listed Hongta Securities, said retail sales in June have continued their steady recovery, and such growth is mainly attributable to the steady economic recovery and increase in household incomes.
He said that among all the sub-indexes in consumption, daily consumption delivered the best performance, while retail sales of cars continued to decline.
Yao Jingyuan, an adjunct researcher of the Counsellors’ Office of the State Council, China’s Cabinet, said he believes consumption plays a key role in the country’s economic upgrading and transformation. He said it is important to roll out more policies to further increase household incomes in the future.
“And to better formulate a vast domestic market, more efforts are needed to overhaul arbitrary regulations hampering consumer activities,” he said.