Government subsidies support consumption growth in China

The surge in retail sales in China over the Lunar New Year holiday defied concerns regarding the country’s slowing economy and volatile stock markets. Resilient consumption growth in China is reportedly due to government transfers and stronger buying power among mid-to-lower income families, particularly in western China, as income distribution and product affordability have improved on the back of government consumer subsidies. Retail sales and restaurant receipts over the holiday period jumped 11.2% YoY to ¥754bn, marginally higher than the 11% registered last year, with the most rapid sales growth seen in gold, jewellery and digital products.

A customer browses for shoes at a mall in Hefei, Anhui province in this March 10, 2015 file photo. Photo: Reuters