Chip shortage, Covid-19 cloud China’s retail outlook

Uncertainty is clouding China’s retail sector for the rest of the year, even as takings at the till beat economists’ expectations last month. Analysts told The Straits Times that the global chip shortage and slowing disposable income growth are likely to weigh on economic growth in the last quarter. Retail sales are a key barometer in measuring the economy’s health and play an important role in China’s national dual circulation strategy, which places greater focus on the domestic economy.

“The dual circulation strategy depends increasingly on expanding retail sales to boost domestic spending,” said NTU professor of economics Tan Kong Yam. “With rivalry between the United States and China having no end in sight, domestic retail sales need to become increasingly important.”

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