A statistics bureau spokesman, Sheng Laiyun, said despite the decline, growth is “very high” and within the government’s target range. The official growth target for the year is 8 percent, which analysts say China easily should achieve.

Sheng said lower growth would help Beijing’s effort to boost domestic consumption and reduce reliance on resource-intensive investment and exports to drive growth.

June growth in factory output slowed to 13.7 percent, down from May’s 16.5 percent rise. Growth in retail sales and investment in factories and other fixed assets also eased.

June exports rose 35 percent over a year earlier but analysts expect Europe’s debt crisis to crimp trade. A survey earlier by a Chinese business group found manufacturing activity in June fell for a third month as foreign orders declined.

June inflation eased to 2.9 percent over a year earlier, falling back below the government target of 3 percent for the year after prices rose 3.1 percent in May.

Also Thursday, the government said foreign direct investment in China rose 39.6 percent in June over a year ago to $12.5 billion.

Thursday’s data also showed investment still is growing faster than retail spending despite efforts to promote domestic consumption. Retail sales rose 18.2 percent in the first half but spending on factories and other fixed assets jumped 25 percent.

Source : Konaxis

Sha Hailin, Deputy Secretary-General of the Shanghai Municipal Government, Municipal Commission of Commerce, said at the seminar, Shanghai netizens online shopping usage rate, the average spending of online shopping are among the first in the country, close to developed countries.
According to Sha Hailin, Shanghai E-commerce (electronic business channels) transactions increased from 208 billion yuan in 2006 to 325 billion yuan last year, an yearly increase of up to 15.9%, increased by 1.5 times. By the end of last year, the number of netizens in Shanghai reached 11.71 million, the online shopping amount accounted for 5.02% of the city’s social consumer goods sales.

Gu Jiahe, secretary-General of Shanghai Municipal Commission of Commerce, said Shanghai gathered a large number of successful online shopping businesses, such as Chinese and foreign E-Commerces including Bai Lian e-commerce, Bian Li Tong e-commerce, Yi Bei China, Netease and third party payment business such as Hui Fu Tian Xia, Kuai Qian, and Huan Xun etc. and Chinese top class logistics companies such as Shen Tong Express, Yuan Tong Express, Zhong Cheng Express and Zhong Tong Express. “These companies are the important support and potential for Shanghai online shopping development.?

At present, Shanghai is speeding up transformation of economic growth, accelerating building of international economic, financial, trade and shipping center. Sha Hailin, said: “to develop e-commerce is important to the Shanghai Construction ‘four centers’ in particular the International Trade Center. Shanghai will continue to increase promotion of e-commerce applications and innovative models, from height of the World Trade Center to promote e-business development. “

According to the Chinese Academy of Social Sciences published “Business Blue Book” , in 2010 annual online shopping sales will increase to 500 billion yuan close to 3% of year’s total retail sales, while in the retail industry, Internet retailers have maintained much higher steady growth than that of the physical retailers.

The report, published by Bates 141, an Asian marketing communications network and part of WPP, one of the world’s leading communications services groups, surveyed people aged 16 to 35 from eight Chinese cities at county level over the past two years.

The survey, entitled Approaching Consumers in China’s Emerging Cities, said under the current situation of urbanization and modernization, consumption markets in the country’s first- and second-tier cities, for example Beijing, Shanghai and Guangzhou, tend to be saturated and people’s spending power would not be enough to support the country’s economic growth.

There are more than 4,000 third- and fourth-tier cities in China. According to figures recently released by the National Bureau of Statistics, the retail sales of consumer goods at and below county level totaled 3.48 trillion yuan ($497 billion) in 2008 compared with 1.84 trillion yuan in 2004.

Source : Konaxis

Consumption made up just 35.3 percent of China’s GDP last year, according to the National Bureau of Statistics.

The conventional wisdom is that Chinese spend so little because they have to pay for health and education out of their own pockets and can look forward to at best a flimsy pension.

However, MGI estimated that reducing precautionary savings by reinforcing the social safety net would add only 0.2-1.1 percentage points to China’s consumption share by 2025.

Many of the policy changes that MGI identifies do not directly relate to consumer behaviour but rather aim to encourage more efficient investment and capital allocation, which would ultimately create faster growth in private income.

For example, if China could raise the share of services in the economy to 55 percent – instead of the government’s current goal of 49 percent – the resulting job and income growth could boost the consumption share by up to 4.8 percentage points, MGI said.

Boosting household incomes by creating more investment products could add a further 1.2 percentage points to the consumption share, while increasing the availability of consumer credit could contribute 1.5-3.4 percentage points, MGI said.

And simply making more and better-quality goods available could add 1.3 points to the consumption share by 2025.

Source : Konaxis