May 15 (Bloomberg) -- China's retail sales grew 15.5 percent in April from a year earlier as rising incomes and a stock market boom encouraged the world's most populous nation to spend.

Sales climbed to 667.3 billion yuan ($86.8 billion) after gaining 15.3 percent in March, the National Bureau of Statistics said today. That was the biggest increase since May 2004 if the first two months of each year are combined to eliminate Lunar New Year holiday distortions.

Premier Wen Jiabao is trying to boost consumption to make China less dependent on exports and investment for growth. The world's fourth-largest economy grew 11.1 percent in the first quarter and the benchmark CSI 300 Index of stocks has soared more than 80 percent this year.

``This is encouraging,'' said Sun Mingchun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. ``But it's too early to say whether it can be sustained, because part of the increase was supported by the stock market.''

The gain beat the 15.1 percent median estimate of 19 economists surveyed by Bloomberg News. For the first four months, sales increased 15.1 percent from the same period last year to 2.8 trillion yuan.

Gome Electrical Appliances Holdings Ltd., China's biggest electronics retailer, said profit surged 75 percent in the first quarter. Tsingtao Brewery Co., part-owned by Anheuser-Busch Cos., posted an 18 percent increase in net income.

Electronics, Jewelry

Electronics sales increased 13 percent in April from a year earlier, while those of furniture jumped 53 percent. Jewelry sales rose 31 percent.

Among 724 executives in China, 61 percent said they will increase hiring in the second quarter, up from 59 percent in the previous three months, according to a survey by recruitment firm Hudson Global Resources.

Households are switching money from bank deposits to the share market.

``I make about 5,000 yuan a month investing in stocks,'' said Peng Li, 25, a student eating at the food court of the Mix C Shopping Mall in Shenzhen. ``I spend most of my money on eating and shopping with friends.''

Minimum Wages

China will strengthen implementation of minimum wages and improve public welfare to support consumption, Premier Wen Jiabao told lawmakers at the annual meeting of the National People's Congress in March.

Disposable incomes in urban areas jumped 19.5 percent in the first quarter and rural households' earnings climbed 15.2 percent.

``Most Chinese people live in the country and the government needs to further boost rural incomes to expand consumption,'' said Zuo Xiaolei, chief economist at China Galaxy Securities Co. in Beijing.

Retail spending in towns and cities jumped 16 percent in April from a year earlier. In rural areas, the increase was 14.6 percent.

The increased wealth of China's consumers is leading retailers to boost investment.

Suning Appliance Co., China's second-biggest home appliance retailer, last month said it plans to raise about 2.4 billion yuan by selling shares to develop a chain of 250 outlets and two flagship shops in Shanghai and central Wuhan city.

Retail sales increased 13.7 percent in all of 2006.

To contact the reporter on this story: Nipa Piboontanasawat in Hong Kong at npiboontanas@bloomberg.net

Last Updated: May 14, 2007 22:43 EDT