Monday, April 17, 2017

Economy: Why America Needs China Even More

(Drivebycuriosity) - It seems America´s economy is cooling again, while China is gaining speed. Good Friday wasn`t so good for the US. Then the government reported the retail sales from March which were quite disappointing: U.S. retail sales fell for a second straight month in March, reports Reuters (reuters). This fits to other weak US data, like the Chicago Purchasing Manager Index, a barometer for the current US industrial activity, which dropped in April to 5.2 points from 16.4 points, signalling slowing industrial growth in the New York region  (marketwatch).

Quite contrary China reports better news. Yesterday we learned that the Chinese retail sales grew in March 10.9% year-over-year, faster than in January & February, we also heard that industrial production growth jumped to (tradingeconomics).

It seems 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. It could even save the US economy from another recession.

PS for illustration I chose am image from China's international fashion week in Beijing in 2016 as symbol for the New China.

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