China's retail sales rose in August at their fastest pace in seven months as consumers splurged on meals out and holidays after disease, heat waves and floods kept people at home earlier this summer.
Sales rose 9.9 percent from a year earlier to 361 billion yuan (US$43.6 billion), the Beijing-based National Bureau of Statistics said on its Web site.
"From July, consumption has been recovering very strongly," said Bob Zhang, economist at Core Pacific-Yamaichi in Beijing. "Some consumption was delayed or postponed by consumers due to SARS, flooding and drought."
Surging consumer spending is helping China's economy, the world's sixth-largest, grow more than twice as fast as any of its larger counterparts.
Sales growth shows few signs of slowing, even as the central bank tightens lending rules to prevent inflation accelerating.
"Our sales in China grew well in excess of 25 percent for the year up to June," Procter & Gamble Co former chairman John Pepper said in Beijing on Wednesday. "We continue to look very strong."
Procter & Gamble's sales of Crest toothpaste, Pampers diapers, Head & Shoulders shampoo and other personal care products in China totaled US$1 billion for the financial year ended June 2003.
"Lower tariffs on imports and also private home ownership and the rapid growth in household borrowing" are fueling growth in consumer spending, said Robert Subbaraman, an economist at Lehman Brothers Japan Inc in Tokyo.
Surging consumer spending and rising imports may help China deflect criticism that the Chinese currency, which is pegged at about 8.3 per US dollar, is too cheap. The US, Europe and Japan have all called on China to allow the yuan to appreciate, saying the peg gives Chinese exporters an unfair advantage.
"One important reason for encouraging imports is to reduce the pressure on the yuan's appreciation," said Core Pacific-Yamaichi's Zhang.
Imports into China rose about two-fifths in the first eight months of this year, while the nation's exports increased by about a third. Overseas sales totaled US$266 billion, while imports were US$257 billion.
Retail sales account for about two-fifths of the nation's gross domestic product, which rose 8.2 percent in the first half of this year.
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