SCIO press conference on China's economic performance in H1 2022
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E-mail China.org.cn, July 20, 2022
Shou Xiaoli:
The last question, please.
National Business Daily:
In April, the year-on-year growth rate of total retail sales in China reached the lowest point in the year's first half. Since then, May and June have witnessed a rebound in the growth rate. Does that mean that the turning point of this year's V-shaped consumption recovery has passed? Is the rapid rebound in consumption related to a short-term stimulus caused by distributing consumption coupons in many places? How does the National Bureau of Statistics predict the consumption trend in the second half of this year? Thank you.
Fu Linghui:
Thank you for your questions. The issue of consumption is of great concern to the people. Since the beginning of this year, various factors have affected consumption growth. In the first half of this year, affected by multiple and sporadic local resurgences of COVID-19, market sales declined, especially with a marked decline in service consumption. In the first half of this year, the total retail sales of consumer goods dropped by 0.7% year on year. However, since May, as COVID-19 has been effectively contained and the policy to boost consumption has taken effect, market sales have grown steadily. The total retail sales in May fell by 6.7% year on year, 4.4 percentage points less than the previous year's decrease. In June, the growth rate shifted from a decline to an increase of 3.1% year on year.
Based on the situation in the first half of this year, the market sales mainly showed the following characteristics:
First, the consumption of goods for basic living registered rapid growth. In the first half of this year, the retail sales of grain, oil, food, and beverage grew by 9.9% and 8.2%, respectively, ensuring people's consumption for basic living.
Second, online retail sales grew steadily. In the first half of this year, the online retail sales of physical goods increased by 5.6%, accounting for 25.9% of the total retail sales of consumer goods.
Third, service consumption dropped. Under the impact of the pandemic, service consumption fell markedly. In the first half of this year, the catering revenue decreased by 7.7% year on year. Service consumption such as traveling also declined.
According to the situation in June, positive changes have occurred in domestic market sales.
First, most of the goods saw an increase in retail sales growth rates. In June, nearly 90% of the 18 categories of goods of enterprises above designated size witnessed rebounds in retail sales compared with the previous month. Among them, the growth rates of the retail sale value of clothing and daily necessities rebounded significantly. Furthermore, retail sales of cosmetics and communication appliances increased by 8.1% and 6.6%, respectively.
Second, the consumption of major commodities played a significant role in driving growth. The introduction and implementation of policies to promote consumption in critical areas such as halving the purchase tax for eligible passenger vehicles, boosted the sales of major commodities like automobiles and home appliances. In June, the retail sales of automobiles, home appliances and audio-visual equipment of enterprises above the designated size rose by 13.9% and 3.2%, respectively, a marked increase from the previous month, driving the growth rate of the retail sales of consumer goods in June by over 1.5 percentage points.
Third, service consumption such as catering was significantly improved. As people gradually increased their out-of-home consumption, service consumption improved as a result. In June, the catering revenue fell 4% year on year, compared with a 21.1% decline in the previous month. The number of domestic tourism trips and income during the Dragon Boat Festival holiday was much better than during the May Day holiday.
Fourth, the consumption in areas struck by COVID-19 rebounded rapidly. In June, the retail sales of goods of enterprises above the designated size in Shanghai decreased by 2.1% year on year, shrinking from the 44.1% decline registered in the previous month. Meanwhile, the retail sales of goods of enterprises above the designated size in Jilin province grew by 5.5%, compared with a decrease of 1.5% in the previous month.
In general, since May, domestic consumption has withstood the impact of COVID-19 and showed recovery momentum, with significantly more positive changes taking place. Although recovery in consumption is still facing constraints such as the slowdown in the growth of personal income and the limited consumption scenarios, the trend of expansion in the consumption scale, upgrading within the consumption structure, and innovation in the consumption model will not change. With improved social security and support of policies to stabilize employment and promote consumption, China's consumption is expected to sustain a sustained recovery. Thank you.
Shou Xiaoli:
Thank you to Mr. Fu Linghui and friends from the media. Today's briefing is at this moment concluded. Goodbye.
Translated and edited by Yuan Fang, Zhang Rui, Zhou Jing, Huang Shan, Liu Qiang, Xu Kailin, He Shan, Yan Xiaoqing, Wang Qian, Zhang Liying, Yang Xi, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
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