Call for new carrots as retail sales ease

CHINA'S retail sales growth slowed in April from March's, which may prompt policy makers to launch new incentives to boost domestic demand.

Retail sales rose 17.1 percent from a year earlier to 1.36 trillion yuan (US$209 billion) in April, the National Bureau of Statistics said yesterday. It eased from the pace of 17.4 percent in March but was higher than February's 11.6 percent.

"Consumer spending starts to slow because households have become more cautious about the impact of government measures to cool the economy," said Li Maoyu, an analyst at Changjiang Securities Co. "The expiry of subsidies on some automobiles was also responsible for the slowdown in April."

China posted its first annual decline in car sales in 27 months in April amid rising fuel prices and the end of the incentives, the China Association of Automobile Manufacturers said on Monday.

Also, sales of household appliances may fall in the coming months following the ending of the government's "old for new program" which allowed families to purchase durable goods such as washing machines.

Xu Weihong, an analyst at Guodu Securities Co, said policy makers should launch new measures to spur domestic demand.

"For example, China can encourage people to spend more on health, education and tourism," Xu said, without elaborating. With housing prices remaining high in China, many people have to tighten their belt over buying a property or repaying housing loans. The belt-tightening curbed domestic demand to some extent, Xu added.

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