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Festival shopping spree despite downturn

(Xinhua)
Updated: 2009-01-26 09:30

The booming Chinese market has become more attractive to foreign retail giants, who have suffered from weak demand caused by the global financial crisis.

Shoppers walk past a mall with festive decoration in Zhengzhou, central China's Henan Province, Jan. 25, 2009. [Xinhua]

"Although the global financial crisis has weighed on China's economy, the fundamental of the country's economy remains unchanged and we are very optimistic about the prospects for the Chinese market," Britain's largest retailer Tesco told Xinhua in an email.

Sales in the rural market, which is believed to have the great potential to boost domestic demand, has reported month-on-month increases since May. November retail sales in rural areas rose 18.3 percent, 8.2 percentage points higher compared with the same period of 2007 and for the first time surpassed urban consumption growth.

Wei Wanqian, a farmer in eastern China's Shandong Province, was busy with the last-minute preparations to celebrate the Spring Festival. He bought a new tractor earlier this month.

"Boosting domestic demand should be the government's major task of economic work," said Zuo Xiaolei, senior analyst at the Beijing-based Galaxy Securities.

"Effective boosting measures along with the improvement of social security system will accelerate the consumption growth by two to three percentage points this year," Zuo said.

The State Council, or the Cabinet, has taken an array of measures to enhance domestic consumption. These included improving the rural distribution network, promoting the subsidized home appliance program and boosting festival consumption.

More detailed measures would come out in March during the delivery of the government work report, sources said.

Although the impacts of global financial crisis were still unfolding, some positive signs surfaced in December economic date, officials and analysts have said. These included the figures on money supply, consumption and industrial output.

Whether the "positive changes" represented a trend was unclear, NBS director Ma Jiantang said.

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