(Reuters) – China’s retail sales is expected to grow at a slower-than- anticipated pace and would now overtake the United States only in 2021 as the trade war between Beijing and Washington takes a toll on demand in the Asian country, according to market researcher eMarketer.
Retail sales in China is expected to grow 3.5% in 2019 to reach $5.29 trillion (4.15 trillion pounds), much lower than a previous forecast of 7.5% growth to $5.64 trillion.
The research firm had expected China to surpass the U.S. in retail sales this year, but based on the current growth projections China will overtake the U.S. in 2021 by about $93 billion, the report said.
“The U.S.-China trade turmoil is even more of a concern for China now that domestic demand impacted one of the country’s largest sectors: auto,” eMarketer forecasting director Monica Peart said.
“But with two simultaneous market challenges, retail sales may struggle to achieve the national growth target of 6% to 6.5% for the year.”
The firm forecasts U.S. retail sales to grow 3% this year amounting to $5.48 trillion.
President Donald Trump in early May imposed additional tariffs of up to 25% on $200 billion of Chinese goods, prompting retaliation by Beijing. Trump earlier this month threatened more duties on Chinese imports if no deal was reached with Chinese President Xi Jinping at a G20 summit, scheduled later this week in Japan.
China has a 21.1% share of the world’s retail market, while the U.S. has a 21.9% share, the report said.
(Reporting by Nivedita Balu in Bengaluru; Editing by Shailesh Kuber)