As we discussed in our most recent Weekly China Report, December’s consumer electronics and appliance sales in China totaled only 79.4 billion yuan which marked a year-on-year contraction of 15%. This has again marked the largest contraction since March 2020 and is a fourth straight month with contraction.
Furniture sales totaled 17.4 billion yuan, which marked a year-on-year contraction of 1%. Furniture sales have now contracted on a year-on-year basis during sixteen of the last seventeen months.
Clothing sales (which includes garments, footwear, hats, and knitwear) totaled 132.1 billion yuan, which marked a year-on-year contraction of 11%. Clothing sales have contracted on a year-on-year basis for three straight months after previously increasing on a year-on-year basis for four straight months.
Also of note is that last month marked the fourth straight month where inflation in China exceeded total retail sales growth. Inflation grew year-on-year by 1.8% and retail sales fell year-on-year by 1.8%. As we have continued to stress in our weekly reports and client updates, consumers in China are still not actually buying more goods compared to a year ago. They are only paying more.