China retail sales top forecasts

The government wants growth to come from domestic spending

Retail sales in China grew at an annual rate of 15.5% in April according to official figures, beating forecasts and marking the fastest pace since 2006.

The month's sales hit 667.3bn yuan ($87bn; £44bn), with grains and building materials seeing big rises.

The growth in sales has been boosted by the expanding Chinese middle class, which has greater disposable income.

Government initiatives to encourage spending, by lowering taxes especially in rural areas, has also lifted sales.

'Solid expansion'

The figures reflect a wider move by China to shift the focus of its economic growth - which has been taking place at breakneck speed - away from exports and towards domestic spending instead.

Qian Wang, an economist at JP Morgan Chase in Hong Kong said the figures showed "the solid expansion momentum in domestic consumption and private consumption" as incomes have increased in urban and rural regions.

Looking ahead analysts expect continued growth.

"The trend is definitely for fast growth to continue in the months ahead, at least through the end of the year," said Xue Hua, an analyst with China Merchants Securities.

Sales of building and decoration materials increased by 31.5% from April 2006 while sales of jewellery increased by 30.8% in the same period.

Sales of edible grains and oil were up 30.1% on a year earlier.