China retail sales weaken in Jan-Feb: government

Growth in Chinese retail sales weakened in the first two months of the year, government data showed Thursday, indicating that consumer confidence had taken a beating from the global economic crisis.

Retail sales, a main measure of consumer spending, were up 15.2 percent in the first two months of 2009, as compared with 20.2 percent in the same period last year, the National Statistics Bureau said.

For all of last year, retail sales were up 21.6 percent.

Consumers in the world's third largest economy spent about two trillion yuan (290 billion dollars) in January and February this year, according to a statement by the bureau.

"The decline in the growth rate is the main indicator here, not the actual headline number," Moody's Economy.com, a research firm, said in a note.

"(This) is why sales growth of 15.2 percent is actually a bad thing. It seems clear the domestic demand is slowing in China."

The consumer data came amid a growing body of evidence suggesting that China is increasingly suffering from the global financial crisis.

The economy grew by nine percent in 2008, slipping into single-digit growth for the first time in six years.

Beijing has announced plans to boost spending on items such as social security and the creation of new jobs, as it seeks to maintain social stability and ease worries that had prevented people from higher consumption.

Even so, Chinese consumer sentiment has been dented by the slowdown, with 45 percent of urban dwellers saying they reduced spending in February because of concerns about the economy, a survey showed.

They were particularly worried about the risk of unemployment, according to the survey, released by research firm Data Driven Marketing Asia.

"These direct experiences undermine sentiment, create uncertainty and lead to a reduction in consumer spending," said Sam Mulligan, the firm's director.

"If consumers receive solid assurances, they will resume spending, (but) if economic uncertainty continues they will become more cautious and consumer spending will continue to decline," he said in the survey report.

The survey, based on responses from 600 urban Chinese consumers, compared with 38 percent who had cut expenditure in January.

In February, the portion of respondents who were concerned about their job security jumped to 26 percent, up from 21 percent in January, the survey showed.

An "astonishing" 12 percent have recently lost their job, sharply higher than three percent in January, the survey showed.