Service consumption remains the pillar of China’s consumer recovery. August was the first month for which the NBS released data on retail sales of services (which expanded by 19.4% year on year); this new indicator encapsulates consumer spending in sectors such as education and tourism. The strength of these dynamics was also reflected in price indices tied to the service industry, which helped to stabilise (still-sedate) headline consumer price inflation readings at 0.1%, in August. Another month-on-month increase in consumer prices—at 0.3%, accelerating marginally from 0.2% in July—underpins our belief that ... (full story)