Friday, January 20, 2017

Economy: Everybody Benefits From The Consumer Boom In China

(Drivebycuriosity) - If we believe the media then China is about to crash. But the reality refutes the gloomy predictions. The data from the economic front show that the Chinese economy is quite robust. Last night we we learned that the Chinese retail sales grew 10.9% in December - the highest growth rate in 2016 (tradingeconomics ).

The numbers prove that the huge country is continuing her secular catching-up process, which is fueled by extreme income & wealth differences to the US and other Western nation values. In 2015 China had about $8,027 income per capita, the US number was  $56,115 (worldbank). Retail growth rates of 10% plus also show that China is making progress with her transformation into a modern service economy. The country is reducing her dependence on exports & manufacturing and is becoming a modern society which is based on domestic demand for goods & services like the US. The transformation progress is fostered by the technological progress (E-Commerce). And people are flooding into the big cites. The rapid urbanization is creating millions of jobs and is driving income growth for the whole nation. Swift rising incomes are fueling consume and so the economic growth of China.

The Chinese consumer boom is raising China´ s importance for the global economy. Many international consumer-related companies, including Nike, GM, Hilton, Disney, Starbucks, P&G, Unilever, and Wal-Mart, are already benefitting from the Chinese retail sales growth. The chart above (source sumzero) shows that the Chinese retail sales are swiftly catching up to the American retail sales and may overtake them this year.  China`s consumer boom will be the engine of the global economy. 


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