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China’s consumption to remain fairly positive in 2019: think tank

Updated: Jan 24,2019 6:53 AM     Xinhua

LONDON — China’s retail sales will remain solid in 2019 thanks to strong consumption service and increasing growth-supporting measures despite a slowdown in automobile, the British think tank Oxford Economics said on Jan 23.

According to Oxford Economics’ study, retail sales excluding cars has held up well recently and consumer confidence has also improved, indicating that concerns about China’s consumers are largely overdone.

“Despite a pick-up at the end of 2018, total retail sales growth declined to 6.9 percent year-on-year for 2018 as a whole, down from 9.1 percent in 2017,” they said in a study, “However, retail sales only include purchases of goods — not services (except catering services).”

The report highlighted that the services currently accounted for over 50 percent of total consumption, so slowing retail sales masked the solid growth in consumer spending on services.

“For example, urban household expenditure on healthcare rose by 15.1 percent year-on-year in 2018, up from 9 percent in 2017,” the report added.

Similarly, sales of gold, silver and jewelry rose by 7.8 percent in 2018 on a yearly basis, up from 5.7 percent in 2017.

“This is consistent with the sales improvement recently observed by American luxury jewelry and specialty retailer Tiffany & Co. Other luxury companies including Kering and Hermes also reported decent sales rises in China last year,” it said.

The researchers noted that the relatively benign outlook is “supported by solid services consumption and increasing growth-supporting measures.”

“We think that the anxiety about China’s consumers is largely overdone,” it added, “we remain fairly positive on China’s consumption outlook.”