As the trade hostilities between China and the U.S. begin to ease, China’s retail sector saw an 8.0% year-on-year increase in November, compared with an expected 7.6% increase. The increase was also credited to stimulus measures and China’s successful November Singles Day shopping extravaganza that mimics Black Friday.
The figures, released today, follow firm signs of progress in Sino-U.S. trade negotiations over the weekend after the world’s two largest economies announced a “phase one” trade deal that would nearly double U.S. exports to China.
This past Friday, the United States and China cooled their 17-month long trade war, which has roiled financial markets, hit global exports and disrupted supply chains.
The “phase one” agreement was first flagged by U.S. President Donald Trump in October but fuller details of the agreement only emerged over this past weekend.
According to eMaketer, retail sales in China will grow in 2019 to reach $5.291 trillion. However, that’s far below their Q4 2018 forecast, which had China’s retail market growing to $5.636 trillion this year. If the current economic climate continues, retail sales in China will surpass the U.S. in 2021 by about $93 billion.
Currently, China has a 21.1% share of the world’s retail market, while the US has a 21.9% share.
“The US-China trade turmoil is even more of a concern for China now that domestic demand impacted one of the country’s largest sectors: auto,” eMarketer forecasting director Monica Peart said. “Other sectors such as manufacturing and construction still show strong growth. But with two simultaneous market challenges, retail sales may struggle to achieve the national growth target of 6.0% to 6.5% for the year.”