China's retail sales of consumer goods are predicted to reach 8.5 trillion yuan (US$1.06 trillion) next year, up 12 percent year on year, according to a latest report from the Ministry of Commerce.

The report forecast that retail sales of consumer goods in 2006 will amount to 7.6 trillion yuan, an increase of 13.5 percent over 2005.

Retailing will be brisk, thanks to sustained growth of China's economy, the public's increasing spending power and improvement of infrastructure facilities in rural areas, the report said.

Improved product quality and after-sale service will also help boost sales, according to the report.

A recent poll by the China Association for Quality Promotion found that up to 80 percent of Chinese consumers are satisfied with the quality of major consumer goods including home appliances, cell phones and automobiles.

Home appliances top the list of satisfactory goods, with an 85.7 percent approval rating. Mobile phones and autos reported satisfactory ratings of 83.7 and 70.44 percent respectively.

Famous brands won favor from most consumers polled, according to the survey.

But the report also warned that overcapacity will haunt a number of industries as a result of 30 trillion yuan worth of new investments over the last four years.

(Xinhua News Agency November 8, 2006)