Retail sales growth hit three-year high in July

China's retail sales grew 16.4% in July to reach US$92.3 billion, the fastest rate of expansion in three years, according to figures released by the National Bureau of Statistics. The increase, which came after a 16% rise in June, was driven by forces such as a 37% year-on-year surge in car sales, an economist with financial services group ING told the South China Morning Post. A 16.9% increase was posted in February of this year, but the figure was distorted by the week-long Lunar New Year holiday and so was revised downwards. In the seven months to July, retail sales increased 15.5% year-on-year to US$651.2 billion, following full-year growth of 13.7% in 2006. The government has long spoken of its efforts to move away from investment-led growth towards a more consumption-focused model. China's household consumption is still just 38% of GDP.