(Yicai) July 16 -- Boosted by policies, China's total retail sales of consumer goods returned to growth last month, after declining in May. Service consumption achieved rapid expansion in the first half of the year.

Retail sales of consumer goods rose 1 percent to CNY4.3 trillion (USD635.3 billion) in June from a year earlier, compared with a 0.6 percent drop the previous month, according to data released by the National Bureau of Statistics yesterday. The total for the first half reached CNY24.9 trillion (USD3.7 trillion), up 1.3 percent from the same period last year.

The return to growth in June reflects increased fiscal spending at the end of the second quarter and the effects of consumption-boosting policies, Pang Ming, senior researcher at the National Institution for Finance and Development, told Yicai. Even though the moderate rebound in consumption may not be sufficient to strongly drive the overall economy, it still played a stabilizing role, he noted.

China's total retail sales of consumer goods and services climbed 2.7 percent in the first half from a year earlier, with retail sales of services up 5.3 percent and retail sales of goods up 1.1 percent, NBS data also showed.

Total retail sales of consumer goods and services is a new indicator introduced last month that covers a broader range of consumption services, as total retail sales of consumer goods only include consumption services in the dining sector.

As people's living standards improve, service consumption is becoming increasingly important to unleash consumption potential and expand consumption space. In the first half, the proportion of per capita service consumption spending to the total consumption expenditure rose by 0.2 percentage point from a year earlier, NBS Deputy Director Mao Shengyong said at a press conference yesterday.

In terms of goods consumption, the growth potential of digital and green consumption is being rapidly released. Retail sales of wearable smart devices, including smart glasses, more than doubled in the first half from the same period last year, while retail sales of high-efficiency appliances soared over 30 percent, Mao noted.

China is expected to further strengthen policies to boost consumption in the second half. It will likely increase the subsidy amount for trade-in programs and enhance policy tools, including maternity subsidies and early childhood education subsidies. The probability that domestic consumption will accelerate is relatively high, said Wang Qing, chief macroeconomic analyst at Golden Credit Rating International.

On July 12, China's State Council released its first-ever five-year plan for consumption, which included quantifiable targets, such as CNY60 trillion (USD8.84 trillion) in retail sales of consumer goods by 2030, and outlined specific measures to expand consumption. Last year, retail sales of consumer goods reached CNY50.1 trillion.

Editors: Dou Shicong, Futura Costaglione