China's retail sales grew steadily in the first two months of this year, bolstered by renewed subsidies for buyers of auto and home appliances and also higher consumer prices.Some analysts expected a faster growth in sales because of the government's push for a consumption-driven economy.

Consumers spent 17.3 percent more year on year in the catering sector in the first two months at 280.6 billion yuan, and retailers sold 2.2 trillion yuan of goods, a surge of 17.9 percent from a year earlier.

The retail sales expanded 17.9 percent on an annual basis to 2.5 trillion yuan (US$366 billion) through February, up 2.7 percentage points from the same period in 2009 and compared with a rise of 17.5 percent in December, the National Bureau of Statistics said yesterday.

Wang Qing, a Morgan Stanley economist saod"Retail sales were likely the only economic indicator that fell below expectations in January and February,"

Wang said"China only had a mild acceleration in the first two months from the growth in December, given the fast price increases during the period."

China has made great efforts to spur consumption to shield the country's economy, which relies on exports, from the influence of the global financial crisis.

The measures seemed to have paid off, according to the January-February data as the strongest growth in sales was seen in autos, which climbed 41.7 percent from a year earlier. It was followed by construction and decoration materials, oil products, furniture, household electrical appliances and jewelry.

It has extended tax incentives for small cars and will continue to offer subsidies to buyers of home appliances, including mobile phones, computers, refrigerators, washing machines and air-conditioners. More products may be added to the list.Higher consumer prices in February also contributed to the growth in retail sales.

The Consumer Price Index grew 2.7 percent from a year earlier last month, further accelerating from the rise of 1.5 percent in January. Rising food costs were the main driver of the CPI rise, according to the bureau.