Chinese retail sales rose 3.7 percent on the year in December, picking up from growth of 3.0 percent in November. In month-over-month terms, retail sales rose 0.12 percent after advancing 0.16 percent previously.

Today's data follow a series of policy measures announced by Chinese officials in September and October in response to ongoing weakness in the property sector and sluggish growth in consumer spending and manufacturing output. Officials lowered the seven-day reverse repo rate, cut banks' reserve requirements, and brought forward planned government spending.

In their statement accompanying today's data, officials characterised the data as showing the economy is"generally stable with steady progress", judging that conditions have"recovered remarkably" in response to their"timely" policy measures. Officials, however, provided little guidance about whether additional changes to policy settings will be considered in the near-term.

Data published today were generally stronger than consensus forecasts. The China's RPI rose from minus 14 to plus 56 while the RPI-P rose from minus 30 to plus 69, indicating that recent Chinese data in sum are now coming in well above consensus forecasts.

The consensus looks for an increase of 3.5 percent on year.

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.