Retail sales in China slow to 0.6% in July

Retail sales in China slowed in July, rising 0.6% year-on-year versus +1% in June and well below analysts' expectations of 1.5% growth. The data, released by the National Bureau of Statistics (NBS), confirm the weakness of domestic demand and consumption, in a context of slowdown in the Chinese economy.

Above all, purchases of higher value goods are having an impact: sales of cars fell by 17%, while those of petroleum products fell by 7.6%, those of furniture by 8.8% and those of construction materials by 14.2%. Bucking the trend were sales of telecommunications equipment, up 20.4%, as well as those of cosmetics (+6.8%), tobacco and alcohol (+6%) and food products (+5.3%).

In retail, restaurant revenues increased 1.4%, while retail goods sales grew 0.5%. In the first seven months of the year, overall retail sales increased 1.2%, while sales excluding automobiles increased 2.7%. Online sales of goods grew by 4.6% over the same period.

The data confirms the difficulty of relaunching domestic consumption, one of the priority objectives indicated by Beijing to support growth. In July industrial production also slowed to 4.5% per year from 5.3% in June, missing expectations.