People visit Dounan Flower Market during the Mid-Autumn Festival and National Day holiday in Kunming, southwest China's Yunnan Province, Oct. 5, 2023. (Xinhua/Chen Xinbo)

Retail sales in October expanded 7.6 percent year-on-year to 4.33 trillion yuan ($596.56 billion), showcasing accelerated consumption in China as the services sector continued to grow faster than sales of goods. The foundation of a consumption expansion and recovery is being consolidated, data released by the National Bureau of Statistics (NBS) showed on Wednesday. 

In the first 10 months, retail sales topped 38.54 trillion yuan, up 6.9 percent.

The year-on-year growth rate in October was 2.1 percentage points faster than in September, signaling a rapid rebound, Liu Aihua, an NBS spokesperson, said on Wednesday at a press conference.

Liu attributed the steady growth to support policies taking effect, strong travel momentum during the National Day holidays, and the October pre-sales for the just-concluded "Double 11" shopping festival.

Sales of both goods and services accelerated last month, Liu noted. The outlook for services consumption is being constantly extended with the release of demand in the post-epidemic period, and spending on tourism and related sectors was boosted by the eight-day Mid-Autumn and National Day holidays.

In October, retail sales of goods rose 6.5 percent year-on-year to 3.85 trillion yuan, while sales in the catering sector stood at 480 billion yuan, up 17.1 percent.

Holiday tourism generated 753.43 billion yuan during the Golden Week, up 129.5 percent year-on-year and up 1.5 percent from 2019, data from the Ministry of Culture and Tourism showed. 

Another major factor in consumption was an increase in e-commerce sales, Liu said. Online retail sales of physical goods increased by 8.4 percent year-on-year from January to October, bolstered by the fast growth of e-commerce and related sectors, Liu said. Online consumption made up 26.7 percent of total retail sales, up 0.3 percentage points from the first nine months.

The "Double 11" shopping festival, said to be the world's largest, wrapped up at midnight on Saturday. China's State Post Bureau and some Chinese e-commerce giants reported record numbers, while others reported positive growth, underscoring Chinese consumers' strong spending power.

China's State Post Bureau said that China set a new record by handling 639 million parcels on "Double 11" on Saturday, 1.87 times the volume on regular days and 15.76 percent higher than on the same day last year.

Observers said that the sound consumption pick-up would boost sustainable economic development, with the situation to persist and support the fourth-quarter economic recovery.

Consumption momentum is set to continue in the fourth quarter, with market confidence and expectations to be further restored, Li Changan, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, told the Global Times on Wednesday. 

The economy has shown continued recovery signs since October, such as a sustained increase in per capita income levels and strong financial and fiscal policy support, which have significantly boosted the consumption recovery, Li noted.

Li said that consumption is one of the driving forces of China's economic development, and it will play a vital role in supporting the economic expansion in the fourth quarter and in 2024.

Consumption contributed 83.2 percent of the economic expansion in the first three quarters of the year, accounting for 4.4 percentage points of the GDP growth rate, official data showed.

China can hedge against uncertainty from overseas markets with more confidence by having stable domestic consumption, Hu Qimu, a deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Wednesday. Companies are able to improve their efforts in the areas of innovation and upgrading amid the steady recovery, rather than reducing investment for risk prevention.

Experts said that China's steady consumption rebound will inject more vitality into the global economic recovery. As the world's second-largest market, China's domestic demand can help the industrial end with a smooth recovery, Hu added.

Liu expected the foundation established for a consumption recovery to be consolidated with improved employment, optimized market supply and demand, and boosts from effective policies.

The authorities have been stepping up efforts to boost domestic demand through support policies. In July, the National Development and Reform Commission, China's top economic planner, unveiled 20 administrative measures to spur domestic spending, including stabilizing spending on big-ticket items and expanding services consumption.