Dec. 12 (Bloomberg) -- China's retail sales increased at the quickest pace in at least eight years on rising incomes, aiding government efforts to curb the economy's dependence on exports and investment for growth.

Sales climbed 18.8 percent to 810.5 billion yuan ($110 billion) in November from a year earlier, the statistics bureau said today, after rising 18.1 percent in October. That was the biggest gain since records began in 1999 and topped the 18 percent median estimate of 21 economists in a Bloomberg survey.

Stronger domestic consumption may help the world's fastest- growing major economy weather weaker demand for exports in a global slowdown. It's also fueling inflation that climbed to 6.9 percent in November, the quickest pace in 11 years.

``Today's number signals that there is strong growth in household demand,'' said Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai. ``This can help pick up some of the slack as export growth slows next year.''

Household spending accounted for 36 percent of China's gross domestic product last year compared with more than 50 percent in the U.S., Japan and India.

China's economic growth is likely to slow to 10.7 percent in 2008 from 11.4 percent this year on reduced demand for exports, according to the Organization for Economic Co-operation and Development.

`Healthier Environment'

A significant global slowdown may reduce the need for economic tightening in China, ``creating a healthier environment that would foster the needed shift toward more sustainable, domestically-driven growth,'' said Frank Gong, chief China economist at JPMorgan Chase & Co. in Hong Kong.

For the first 11 months, retail sales rose 16.4 percent from a year earlier to 8.02 trillion yuan, the statistics bureau said. Sales in urban areas jumped 19.2 percent in November from a year earlier, while rural spending climbed 18 percent.

A ``large part'' of this month's spending growth was due to inflation, said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong.

Car companies are sharing the spoils of the shopping spree. Automobile sales climbed 35 percent in November from a year earlier. Geely Automobile Holdings Ltd., China's largest privately owned carmaker, earlier reported a 56 percent jump.

Cosmetics sales rose 33 percent, today's report showed, and furniture spending soared almost 60 percent.

Meat, Poultry, Eggs

Food and fuel costs are driving China's inflation. Spending on meat, poultry and eggs jumped 45 percent in November from a year earlier. For grains and edible oils, the gain was 48 percent. Spending on petroleum products climbed 22 percent.

China has raised minimum wages and reduced a tax on interest income to fatten consumers' wallets.

Disposable incomes among urban households, after adjusting for inflation, rose 13.2 percent to 10,346 yuan in the first nine months from the same period a year earlier. Earnings in rural areas climbed 14.8 percent to 3,321 yuan.

Stock and property-price gains are encouraging spending.

The benchmark CSI 300 Index of shares has surged almost 150 percent this year. House prices in 70 major cities jumped 9.5 percent in October from a year earlier, the biggest increase since records began in August 2005.

China's economy, the world's fourth largest, expanded 11.5 percent in the third quarter from a year earlier.

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

Last Updated: December 11, 2007 21:41 EST