China's consumption expected to expand in July: analysts

China's consumption is forecast to enter positive territory for the first time this year in July, Shanghai Securities News reported Wednesday.

"Consumption is expected to rise around 2 percent year-on-year in July as China's consumption market will further warm up in the second half," Tang Jianwei, chief researcher of the Bank of Communications, told the paper.

Official statistics show that China's retail sales of consumer goods, a major indicator of consumption growth, declined 1.8 percent year-on-year to 3.35 trillion yuan ($480.27 billion) in June, narrowing by 1 percentage point from May.

Factors including the reopening of cinemas in low-risk areas and work resumption of tourism enterprises have supported the recovery of the consumption market, according to the paper.

China allowed cinemas in low-risk areas to reopen starting on July 20. Box office takings on the day stood at a paltry 3.5 million yuan amid stringent anti-virus measures.

Meanwhile, notable growth of vehicle sales and recovery of catering business will help consumption return to positive territory in July, Zhu Jianfang, chief economist of CITIC Securities, was quoted as saying.

Figures from the China Passenger Car Association showed retail sales of passenger vehicles rose 2.9 percent month on month to exceed 1.65 million in June, the fourth consecutive month that the market saw month-on-month growth.