China has registered the fastest pace of retail sales record since 1999 and it is a clear indication that the heightened domestic consumption will act like a cushion to the world’s fourth biggest economy against an export deceleration. The statistics bureau has reported that retail sales in China upped 22 per cent to a record 814.2 billion yuan or $116 billion in April after gaining 21.5 percent in March.

 

On 10 May, the Governor of Central Bank Zhou Xiaochuan stated that it was important for China presently to save less and invest on consumption instead. He explained this move as necessary in order to reposition the economy that was too much tilted towards investment and foreign sales. The recent graph shows export growth depreciating to 22 per cent during the initial four months of 2008 as compared to 26 per cent during all of 2007.

 

Sumei Tang, who is a Sydney-based economist at Moody's Economy.com remarked that the retail sales in China will continue building up fervently. Sumei Tang explained that since incomes are booming, the Chinese government is very upbeat about encouraging consumer demands in order to balance declined export growth.