China Retail Sales: A Light in the Darkness?

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Amidst the gathering gloom and snowballing conventional wisdom idea that China is going to have a hard landing (which is not neccessarily untrue; all I’m saying is that, as per the previous post about protests, some people now seem to be looking for evidence to back up the idea rather than examinging the fact and forming a hypothesis), there are a couple of pieces of evidence that suggest the hopes being placed on the resilience of the Chinese consumer may not be completely misplaced. Retail sles in China rose 22 per cent in October over a year earlier, marginally slower than the previous month but still a very respectable rise indeed. Meanwhile, according to the Wall Street Journal, TV ad sales also provided another glimmer of hope: “Local and international advertisers pledged to spend almost $1.4 billion to run commercials on China’s top TV network next year, indicating continued confidence in the spending habits of Chinese consumers, despite global economic woes.”

On the production side, however, the shadows lengthened with the report that electricity consumption had dropped 4 per cent last month (details here), almost all of it coming from industrial customers. China National Petroleum Corp. meanwhile said oil consumption had contracted “sharply” since September. Could be a chilly winter.