Chinese retail sales rose 4.6 percent on the year in August after growth of 2.5 percent in July, well above the consensus forecast for an increase of 3.0 percent. Sales rose 0.31 percent on the month after falling 0.06 percent previously.

Improvement in this report is broadly in line with PMI surveys and inflation data published earlier in the month. Officials characterised today's data including a stronger-than-expected industrial production report as indicating"accelerated recovery" and also noted improved demand and stable prices.

Despite these results, the China RPI and RPI-P are unchanged at plus 7 and minus 10 respectively, indicating that recent Chinese data are, in sum, still coming in no better than the consensus forecasts.

After rising 2.5 percent in July, which was well below expectations, year-over-year sales in August are expected to rise 3.0 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.