Weaker China consumer spending seen as income gains moderate

Beijing

CHINESE consumers, whose spending helped underpin the nation's first-half expansion this year, may not be able to deliver a repeat performance in the second as income growth slows.

Household income growth slumped to 6.5 per cent in the first six months from 7.6 per cent a year earlier, data released last Friday showed. Headwinds on consumer spending may increase as officials signal they will step in to curb pay gains to keep manufacturing competitive with rival nations that have cheaper production costs.

As shoppers become an increasingly crucial growth driver, any erosion of their strength would weaken the ability for the consumer-led expansion to offset weakness i…