Chinese retail sales fell 0.14 percent on the month in December after dropping 0.08 percent in November, with year-over-year growth still negative but improving from a decline of 5.9 percent to a fall of 1.8 percent, above the consensus forecast for a decline of 8.3 percent. Previously published PMI survey data also showed ongoing weakness in economic conditions in December, with activity and sentiment impacted by a surge in Covid-19 cases in many parts of the country after authorities eased public health restrictions late in the year.

Retail sales have missed expectations the last three reports and especially so in November when sales fell 5.9 percent year over year. December sales are expected to fall 8.3 percent.

Retail Sales measure goods that are sold to the consumer or end-user, generally in small quantities and in the state in which they were purchased by the retailer. China's retail sales are reported monthly. The critical value is the change from the same month in the previous year.

Retail sales tend to have a muted impact because the Chinese economy is not heavily reliant on consumer spending. However, the government is trying to stimulate consumer spending to give the economy more balance. To this end, the government put into place a basket of stimulus measures, including government subsidies and tax breaks for home appliances and cars, to expand consumption to sustain the economic growth, which was slowed by a slump in exports amid the global economic downturn.