China’s 2011 retail sales rose 17 percent from the previous year to RMB18 trillion (USD2.86 trillion), a sign that China’s attempts to shift its economic growth model toward domestic consumption are bearing fruit. The country’s Ministry of Commerce said retail sales would grow by 14 percent in 2012. China’s National Bureau of Statistics will release official economic data next week.

China’s Ministry of Commerce said that foreign direct investment (FDI) rose 9 percent to USD115 billion in 2011. The ministry previously said that FDI for the first 11 months of the year came in at USD103.8 billion, which would put December’s inflow at about USD11 billion, representing a 21 percent year-over-year decrease for the month. China’s FDI in November declined 9.8 percent year over year, the first decline in FDI in 28 months. The Ministry of Commerce has targeted yearly FDI inflows of USD120 billion in each of the next four years.

A senior Chinese government researcher has said that China’s policymakers have targeted gross domestic product (GDP) growth of less than 8 percent in 2012. Writing in the People’s Daily, the mouthpiece of the Communist Party, Lin Zhaomu said that China has targeted GDP growth of between 7 percent and 8 percent, in line with Beijing’s plan to deliver average growth of 7 percent in 2011 to 2015. China had targeted 8 percent annual GDP growth for the last seven years, although growth has surpassed this target. The country’s economic growth targets are seen as guidelines rather than a hard-and-fast goal. However, China’s provincial governments have issued growth targets well above the national target. China’s 31 provinces have targeted an average of 10.5 percent annual GDP growth for 2011 to 2015.

Manufacturing activity in South Korea declined for the fifth straight month in December, according to data released by HSBC. The HSBC Purchasing Managers Index (PMI) came in at a seasonally adjusted reading of 46.4 in December, the sharpest contraction since February of 2009. Readings below 50 suggest that manufacturing activity is contracting, while readings above 50 suggest an expansion of manufacturing activity. HSBC economists said that the sharp drop in manufacturing activity in December “confirms that [South] Korea’s economy is losing steam, with employment contracting over the month for the first time in almost three years.” HSBC expects South Korea’s central bank to cut interest rates by 25 basis points in the first quarter to support the economy.