Consumption growth in China expected to weaken further this year: China’s commerce ministry
The medium-to-long-term accumulated risks throughout China’s economic development are going to be more prominent this year.
The medium-to-long-term accumulated risks throughout China’s economic development are going to be more prominent this year, said Mr Wang Bin, an official with the country’s commerce ministry at a press briefing on Tuesday. Hence ‘consumption growth is very likely to slow further’, he said.
Mr Wang alluded to the soft retail sales numbers last year, where growth averaged at 9.0%, the slowest pace in 15 years. The subdued sales were due to ‘periodic’ weakness in car sales and housing-related spending, he noted.
However, support from the government should help cushion the downturn faced by the retail sector, Mr Wang said.
A weak auto market, slower iPhone sales
Car sales in China shrank for the first time in two decades for last year. December’s auto sales fell 13.0% in the sixth straight month of decline, bringing annual sales to 28.1 million vehicles, a 2.8% decline from a year earlier.
China’s Association of Automobile Manufacturers is expecting the weakness in car sales to persist for this year, and has forecast flat sales of 28.1 million vehicles.
The country’s retail earnings gained 8.5% during the six-day Chinese New Year holiday period last week, but that growth was the slowest since 2011 when compared to previous years. An increase in shopping was seen for new-year gifts, electronic products, traditional foods, and local specialty products.
A recent report from International Data Corporation (IDC) has shown shipments of Apple iPhones to China down by around 20% for the final quarter of last year due to the slowing economy and the costly price of iPhones.
Apple’s chief executive Tim Cook had blamed a part of the slow sales on the economic slowdown in China.
Chinese authorities have stated that the country has ample room to provide ‘macro policy support’ for its economy.
And yet, a vibrant luxury goods market
Even as a slowdown is seen in the retail sector, the luxury goods market is much less affected by the downturn. Some luxury items companies have reported robust sales in the Chinese market.
French luxury handbag brand Hermes reported strong sales momentum in its Chinese stores in the fourth quarter. Luxury bag player Louis Vuitton recently stressed that sales were picking up in the country.
According to a report published in November by global consultancy firm Bain and Company, China is expected to account for the lion’s share of growth for the global luxury goods market in 2018. In the Chinese market, luxury sales for last year grew 18.0% at current exchange rates to €23.0 billion (¥175.7 billion), driven by rising demand rather than by price increases, the report said.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets