CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

China retail sales: Consumers tighten belts amid Covid curbs, property downturn sending another shock for global outlook

By Mensholong Lepcha

Edited by Jekaterina Drozdovica

16:36, 24 November 2022

Chinese customers buy imported products from all over the world at a Walmart Sam's Club.
China’s zero-Covid policy and property sector weakness hurt consumer confidence. Photo: humphery / Shutterstock

Retail sales in China unexpectedly fell in October 2022 as sales activity in the world’s second largest economy lost momentum after four straight months of growth. 

With China reporting record-high Covid-19 cases on 24 November, the near-term prospects of rebound in consumer activity in China looked highly unlikely. The latest development does not bode well for the global economy due to China’s place as a top consumer of commodities and energy.

In this article, we talk about China retail sales, its history and main drivers, and look at the forecasts from economic experts. 

What are retail sales and how are they measured in China?

Retail sales measure the amount of physical goods and services sold by businesses through stores and online platforms.

This important metric tracks consumer demand for goods and services and measures consumer spending power. Investors look to this data set to measure the health of the economy.

Retail sales in China are measured and published by the National Bureau of Statistics of China. The data set is published on a monthly basis.

According to the National Bureau of Statistics of China, legal person enterprises, industrial activity units and self-employed households engaged in commodity retail activities or providing catering services, which represent the majority of China’s retail industry, are surveyed for the retail sales data set.

Monthly retail sales are expressed in absolute terms and in terms of year-on-year or month-on-month percentage growth or decline.

What is your sentiment on USD/CNH?

Vote to see Traders sentiment!

China’s retail sales history

Historical China retail market data compiled by economic data provider Trading Economics revealed that China retail sales growth averaged 12.75% between 1993 and 2022.

More recently, data showed the retail market in China slumped at the onset of the Covid-19 pandemic at the start of 2020.

China’s retail sales, 2018 - 2022

Year-on-year retail sales growth slumped to an all-time low of -20.5% in January 2020 as China underwent an unexpected and severe lockdown in a bid to contain the spread of the Covid-19 virus that was reported to have originated from the city of Wuhan in China.

The Chinese economy rebounded with strength in the second-half of 2020 as the early lockdowns enabled the Asian nation to reopen its economy while the rest of the world was still facing devastating Covid-19 waves.

In early 2021, China retail sales posted their highest year-on-year growth in over 25 years. China retail sales growth rose 34.2% in March 2021 from a low base a year ago.

More recently, Chinese consumer demand has shown weakness, hurt by a debt and bankruptcy crisis in the nation’s real estate sector.

China’s strict zero-Covid policy amid sporadic flares in virus infections across the country has dented economic recovery in Asia’s largest economy.

In April 2022, China retail sales growth slumped to a two-year low, declining by 11.1% on a year ago after lockdowns in major centres, including Shanghai and Beijing, put a stop to business activities.

China’s zero-Covid policy

The National Bureau of Statistics of China reported an unexpected 0.5% fall in China retail sales during the month of October 2022.

The decline in China retail sales in October brought an end to four consecutive months of sales growth in China.

Data showed that consumer activity was especially hurt in urban China due to strict Covid restrictions in the cities. The retail sales of urban consumer goods fell 0.6% year-on-year in October. In contrast, retail sales of rural consumer goods rose 0.2% in October.


2,417.42 Price
+0.350% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 21:00 (UTC)
Spread 0.30


19,568.30 Price
-1.060% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8


0.61 Price
+1.110% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


3,443.94 Price
-1.270% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

A study of October’s retail sales data indicated that Covid-19-related measures are playing a critical role in the behaviour of consumers.

With large events curtailed due to restrictions, catering services posted the biggest year-on-year decline in sales at 8.1% in October 2022, out of all items. 

Meanwhile, stay-at-home items such as food and beverages posted sales growth in October. Traditional Chinese and Western medicines items posted a 8.9% year-on-year jump in sales in October 2022.

Beleaguered Chinese property sector

Rock-bottom consumer confidence in Chinese property developers have hurt economic activity in China as much as the strict Covid-19 restrictions.

The property sector is crucial to household wealth – many  see real estate as the primary asset for wealth appreciation and preservation. Chinese real estate, a material-hungry sector, is the biggest consumer of steel and cement in the world.

Analysts have called the Chinese property market a “systemically important” sector. According to Nomura, China’s property sector contributed 16.4% to its total gross domestic product (GDP) in 2020, while taxes from the property sector amounted to 44% of China’s total government revenue.

Chinese property developers are currently reeling under a debt crisis on the back of a deleveraging cycle embarked by authorities.

Cash-strapped developers like China Evergrande (3333) have defaulted on loans and failed to complete residential projects prepaid by consumers.

Latest data underscored the loss of consumer confidence in the Chinese real estate market with residential property sales extending its year-on-year decline by 28.2% in October 2022.

Retail sales have suffered greatly due to this development. In October, household appliances and AV equipment saw the biggest slump of all items at 14% year-on-year decline. Sales of furniture and building decoration materials fell 6.6% and 8.7%, respectively, in October, compared to a year ago.

China retail sales forecast for 2023 and beyond

“The recent easing of Covid measures should be positive for retail sales and therefore some service sectors. Local governments should be able to finish some uncompleted home projects with preferential policies on bank lending to developers,” said Iris Pang, Greater China chief economist at ING Think, on 15 November.

However, on 24 November, China reported record-high Covid-19 infections as authorities imposed nationwide lockdowns and mass testing, according to Reuters.

With the Chinese real estate sector expected to undergo a long and arduous cycle to recovery and deleveraging, easing of Covid-19 restrictions look to be the only immediate catalyst for growth in the retail market in China.

JP Morgan analysts said in a 18 November note:

“Recent housing-related measures, including liquidity support for developers and easier regulations on banks with property sector exposure, reinforce our expectation that the housing market will stabilise next year only after a further significant decline.”

Meanwhile, IMF First Deputy Managing Director Gita Gopinath called for “recalibration” of China’s zero-Covid strategy which should include “boosting the pace of vaccinations and maintaining it at a high level to ensure that protection is preserved”.

Elsewhere, Sean Darby, Global Equity Strategist at Jefferies, saw China as a counter-play to its global peers, observing:

“The gradual easing of Covid restrictions and the backstopping of the real estate sector ought to mean that China acts as a counter-cyclical force in 2023 just as the rest of the world tries to stave off recessions.”

Finally, Trading Economics, as of 24 November, saw China retail sales increasing by 3% year-on-year in 2023.

The bottom line

Forecasting China retail sales growth is a challenging task due to the unknowns of the future. Therefore, it is important to note that analysts and experts can be wrong in their predictions.

Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence. 


When is China retail sales published?

Retail sales in China are measured and published by the National Bureau of Statistics of China. The data set is published on a monthly basis.

Why is China retail sales declining?

China’s zero-Covid policy and property sector weakness are likely to be the main reasons for declining retail sales in China.

When will China retail sales rise?

Short-term Chinese retail activity is dependent on Covid-19 outbreaks and lockdowns. Over the medium to long term, consumer confidence in the property sector is crucial for the health of the Chinese economy. Trading Economics, as of 24 November, saw China retail sales increasing by 3% year-on-year in 2023. Note that their predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence. And never invest money you cannot afford to lose.

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 630,000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading