China goes shopping

The Chinese went on a spending spree last year, laying out a record $107-billion for consumer goods, and demand for luxury items is increasing, the Commerce Ministry said Thursday.

Retail sales rose 17 per cent in 1984 and could go up by nearly 20 per cent this year, the ministry told the New China News Agency and the newspaper China Daily.

It said luxury goods, clothing and better food were in demand.

The ministry said sales of food last year increased by 18 per cent, clothing by 16 per cent and household goods by 20 per cent.

This year refrigerators, television sets and high-protein foods are expected to be popular.

Fancy electrical goods have replaced the three status symbols of only a decade ago – bicycles,watches and manual sewing machines.

Western economists said the spending spree, while reflecting the success of an incentive-led economic boom, could also cause inflation. They said the Government would have to tread very carefully with its far- reaching economic reforms.

China has announced that during 1985 it will adjust prices to even out the distorted state- set price system, but workers’ real incomes will be protected where needed by wage increases.

This means more money will be chasing a limited number of consumer goods. Light Industry Minister Yang Bo said recently that supply might sometimes fail to meet demand.