Uneven retail rally seen in China

CHINA'S consumers are leading an uneven recovery in the world's second-biggest economy that has retailers expecting stronger sales in six months, early results of a national survey showed yesterday.

The China Beige Book survey of more than 2,000 executives revealed that the retail sector had the strongest revenue growth and business expectations in the fourth quarter of 2012.

The survey broadly detected a mild economic recovery with the hard-hit sectors of real estate, mining and manufacturing - to a lesser extent - joining retail at the head of the upswing.

"The revenue growth pickup was notable in luxuries and durable goods - furniture, appliances and autos," said the survey, conducted between October 26 and December 2 by New York-based CBB International and based on the US Federal Reserve's economic report of the same name.

"Retailers' mood remains quite hopeful, with 72 percent forecasting higher sales in six months, up 4 points on last quarter. A remarkably low 6 percent foresee declines," it said, adding that 61 percent of retailers reported higher sales in the fourth-quarter survey than in the third quarter.

The biggest bounces were seen in Guangdong Province, Beijing, the northeast and central regions of China - locations which the third quarter's survey found had the biggest spending falls.

But the retail rebound was not evenly distributed, with Shanghai and the southwest region recording falls in spending.

The survey's findings are reflected in the most recent raft of economic indicators from China, revealing a mild rebound taking hold in the current quarter, and in policymaker comments.

China's retail sales grew 14.9 percent year on year in November, above the 14.6 percent forecast in a Reuters poll.

China is on course to end 2012 with the slowest full year of growth since 1999 and while the 7.7 percent rate forecast in a Reuters poll is way above the world's other major economies, it is far below the roughly 10 percent annual growth seen for most of the last 30 years.

Weakness in the external environment remains a key drag on an economy in which exports generated 31 percent of gross domestic product in 2011, according to World Bank data, and where about 200 million jobs are supported by foreign investment.

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