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Per-capita spend up 8.9% in first half

By Zhang Ran (China Daily)
Updated: 2009-07-28 08:12

Customers shop at a home appliances and furnishing market in Beijing. The per-capita expenditure for urban residents rose to 5,979 yuan in the first half of this year, a sign of economic recovery. [CFP]

China's per-capita expenditure for consumption increased 8.9 percent year-on-year in the first-half despite a registered unemployment of 9.06 million urban residents amid the economic recession.

The figure, beating analysts' forecast of around 7 percent, indicated a strong recovery in the country's economy.

Per-capita expenditure for consumption was 5,979 yuan, a year-on-year increase of 8.9 percent, and a real growth of 10.3 percent after deducting price factors, the National Bureau of Statistics (NBS) said yesterday on its website.

The result was based on a nationwide sampling survey on 65,000 urban households, it said.

Meanwhile, per-capita disposable income of urban households was 8,856 yuan, a year-on-year increase of 9.8 percent, and a real growth of 11.2 percent after deducting price factors, NBS said yesterday.

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The expenditure for consumption figure is in line with the robust growth of total retail sales in the first-half, which rose 15 percent from a year earlier, according to figures released by NBS earlier.

"Both are better than expected," Dong Xian'an, chief economist with Industrial Securities said. "They indicate a strong consumption confidence."

For the second half, Dong said per-capita expenditure for consumption could witness over 10-percent growth.

Hu Yuexiao, economist, Shanghai Securities, agreed, pointing out that consumption will see stable growth in the coming months thanks to the booming property market, which is expected to boost more related consumption.

House and car purchases are the two main engines that have driven consumption in the first quarter. NBS figures showed that furniture sales went up by 28.3 percent year-on-year, and vehicle sales went up by 18.1 percent in the first-half.

China has recently announced a batch of measures to jack up domestic consumption in a bid to offset the export slump. These include raising pension and minimum allowance for low-income people and issuing vouchers in some cities to boost consumption.

Consumption accounts for 3.8 percentage points in the country's economic growth, which witnessed 7.9 percent growth in the first half, according to NBS spokesman Li Xiaochao.

"We see more people shopping and prices beginning to rise. The economy is recovering and the recovery is intensifying. All the government's policies have worked together to help us overcome the financial crisis," Li said earlier.

"The national economy may grow 11 percent year on year in 2010, and consumption could contribute as much as 5 percentage points to it," said Dong from Industrial Securities.