It's becoming more obvious why Beijing launched a massive program to ramp up infrastructure construction. The rescue plan makes sense, but will it be enough? From Reuters:
A retrenchment in Chinese consumption would mark a sudden and, for the global economy, unwelcome reversal of a long-established trend of robust spending that had been supported by higher incomes and government policies to tilt growth away from investment and exports.
"Retail sales have been hit by the slowing economy and especially by falling asset prices," said Li Lihong, senior analyst at CITIC-Kington Securities in Hangzhou. "That situation will last for some time.
The bottom fell out from virtually every category that composes the retail index.
Sales of recreational goods in October were up 2.1 percent from a year earlier, down from an 18.0 percent annual rise in the first three quarters. Sales of home appliances in October increased just 0.8 percent from a year earlier, down from a 19.6 percent annual rise in the first three quarters.
"Anecdotally, it's clear that consumption growth slowed in September and October," said Stephen Green, an economist with Standard Chartered in Shanghai. "Pretty much all our customers are telling us that."
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