The world’s second largest economy has been in recovery mode for several months. Now consumers are starting to spend more, pushing retail sales up to 3.36 trillion yuan ($ 495 billion dollars) in August, up 0.5% from a year earlier. Although small, the gain marks the first time sales have increased in 2020.
Chinese authorities announced the increase at a monthly press conference on Tuesday, pointing out that the country is also seeing economic improvement elsewhere.
“The labor market has stabilized and travel restrictions have been lifted,” said Fu Linghui, a spokesman for the National Bureau of Statistics. “People are more willing to come out and use.”
China’s recovery makes it an outlier as the pandemic weighs for the rest of the globe.
China’s economy has bounced back since the $ 14 trillion economy fell 6.8% in the first quarter, the worst jump in a three-month period since China began publishing quarterly figures in 1992.
“Expenditure remains strongest among wealthier consumers, as evidenced by continued rapid growth in car and property sales,” Capital Economics economists wrote in a research note on Tuesday, although they noted that the data suggests the recovery is “expanding.”
Signs of growth
Tuesday’s data revealed other positive signs. Industrial production and capital expenditure rose in August, while unemployment rose slightly lower – 5.6% in August compared with 5.7% in July.
“This growth has brought some jobs back to the market,” said Iris Pang, chief economist for Greater China, in a research note.
“This is, in fact, the internal growth circulation that China is promoting,” she added, referring to Beijing’s recent focus on stimulating domestic demand and trying to reduce its dependence on foreign trade, capital and technology as tensions rise with the West.
Even Fu, the government’s spokesman, said on Tuesday that the country is still facing “high unemployment pressure” as a record number of new university graduates enter the job market. He said many of these people have had trouble finding a job because of the pandemic.