Retail sales in China fall 3.5% in March, first contraction in nearly two years
Graphic: Deng Zijun/GT
China’s retail sales, the main indicator of consumption, fell 3.5% year-on-year in March, the first contraction since August 2020, as recent COVID-19 outbreaks restricted consumption in some regions.
In the first quarter, the country’s total retail sales stood at 10.87 trillion yuan ($1.7 trillion), up 3.3 percent year-on-year, according to data from the National Bureau of Statistics (NBS). published on Monday. Online sales rose 8.8 percent to 2.53 trillion yuan, accounting for 23.2 percent of total retail sales.
However, last month retail sales fell 3.5 percent year on year to 3.42 trillion yuan, down 1.93 percent month on month, according to the NBS.
During the month, auto sales fell 7.5% year-on-year, restaurant sales fell 16.4% year-on-year, and silver and jewelry saw declines. 17.9% year-on-year.
On the other hand, petroleum products, medicines, food and beverages recorded the largest increases.
Ying Xiwen, deputy director of the Center for Macroeconomics Research at China Academy Minsheng Bank, told the Global Times on Monday that the decline in the consumer sector was in line with expectations as a resurgence of new coronavirus cases in March weighed on domestic consumption.
An unexpected outbreak of Omicron cases has thrown a number of domestic cities into near-term economic uncertainty, including the country’s financial hub, Shanghai, in eastern China, and heavy manufacturing hub, Jilin, in northeast China.
Shanghai’s lockdown is of particular concern as the city is a key driver of China’s giant $18 trillion economy. Coronavirus infections have continued to grow with total cases now surpassing 200,000 during Omicron’s latest outbreak, making Shanghai the worst-hit city on the Chinese mainland since 2020.
“The growth rate of retail sales throughout the year depends on when the latest epidemic will be contained and how anti-epidemic measures will be adjusted,” said Tian Yun, an economist based in Beijing, to the Global Times on Monday.
Tian predicted that the country’s retail sales index would reach 5 percent for the whole year, if the latest surge was effectively brought under control as soon as possible.