China's Retail Sales Hit Three Year High

China's retail sales for the month of August jumped 17.1% year-over-year to 711.7 billion yuan ($95B), easily topping economist expectations of +16.5%. Sales rose 16.4% in July. The strong increase in sales is credited to higher prices and rising incomes. A 6.5% increase in August CPI, the most in a decade, sent Chinese stocks tumbling on Tuesday. However, consumers have benefited from sizable stock market gains and a 14.2% first-half increase in disposable income among urban households. The chief economist at Citic Ka Wah Bank in Hong Kong commented, "After stripping out inflation, the number (disposable income) is still accelerating and pretty strong." Beijing has also lifted minimum wages, expanded welfare coverage and lowered a tax on interest from savings accounts. The Shanghai Composite gained 1.15% to 5,172.63 on Wednesday, recouping some of Tuesday's decline of 4.5%.

Sources: Bloomberg
Commentary: China's August CPI Hits Decade High, Surplus Widens; Stocks Drop • Investing in China, The Non-ETF Way • The 'Made in China' Sale is Over: Ways To Profit
Stocks/ETFs to watch: CAF, FXI, PGJ

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