Commerce official upbeat over consumption

BEIJING - A senior commerce official said Thursday he was still optimistic that domestic consumption will accelerate in the coming months and that China is able to achieve a 14.5-percent growth in retail sales this year despite a slowdown in the first quarter.

Speaking at a press conference, Shen Dangyang, spokesman for the Ministry of Commerce, said the authority sees domestic consumption stabilizing in the first six months and picking up pace in the second half of the 2013.

Shen said domestic consumption has contributed to 55.5 percent of growth in gross domestic product in the first quarter, 3.7 percentage points greater than a year ago.

The official's remarks came three days after China registered a nominal growth of 12.4 percent year-on-year in retail sales in the first three months, slowing from 14.8 percent seen in the same period of last year.

The growth rate was also 1.9 percentage points lower than the full-year growth in 2012, triggering concerns over the weakness of the world's second-largest economy.

After adjustment for inflation, the retail sales growth in real terms was only 0.1 percentage points slower than a year ago, Shen said.

He attributed the tepid growth in consumption to slower increases in retail prices and residents' income, declines in auto and oil consumption as well as the government's high-profile efforts to promote frugality nationwide.

As the macro economy warms up and the environment for consumption and investment improves, Shen said, the growth of retail sales will rebound in the third quarter in the midst of income distribution reform and accelerating urbanization.

The government is also studying the possibility of new subsidies for consumption, the spokesman added.