China's retail sales increased 13.7 percent in July especially in clothes, furniture and cell phones, mainly boosted by rising incomes, Reuters reported. According to the National Bureau of Statistics, Retail sales rose to 601.2 billion yuan after climbing 13.9 percent in June. "Obviously we want retail sales and consumer spending to be a bigger driver of the economy so that we can rely less on the investment side," said Reuters quoting Kent Yau, an economist with Core Pacific-Yamaichi in Hong Kong as saying. "China will continue to encourage domestic consumption, but it faces a tough challenge, mainly due to the difficulty of increasing farmers' incomes and the lack of a social welfare system in the rural areas," said Li Mingliang, a senior analyst at Haitong Securities in Shanghai.. The retail sales figures give only a partial picture of Chinese spending because they do not capture the service sector. Nor are the figures adjusted for seasonal changes in spending or deflated to show underlying volumes.