Friday, September 16, 2016

Economy: America Needs China Even More

(Drivebycuriosity) - This week we got conflicting signals front the global economic front. The US retail sales fell in August 0,3% and their year-over-year growth rate slowed to just 1.9% (calculatedrisk). But the Chinese retail sales grew 10.6% year-over-year, faster than in July (plus 10.2% tradingeconomics).

The American retail slowdown is disappointing in the face of an expanding job market, climbing wages, stock & home prices and cheap gasoline. Maybe the Americans are losing their traditional optimism. Maybe the American majority is too scared about the economy and is too timid to consume (driveby).

It seems that the Chinese consumers are replacing the Americans as the engine of the global economy. China (1.3 billion people) is swiftly transforming into a modern economy, helped by the technological progress. People are flooding into the big cites. The rapid urbanization creates millions of jobs and is driving income growth for the whole nation. Swift rising incomes are fueling the economic growth of China and so the retail sales. The rising importance of the Chinese consumers is a boon for global consumer companies like Apple, McDonald´s, Starbucks & Co. and could compensate at least of the weak American retail.

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