Economics: China - Still On Track

(Drivebycuriosity) -  If we believe the pundits then China is about to crash. But the reality refutes the gloomy predictions. This morning we learned that China´s retail sales grew 10.1% in March (Jan/Feb + 9.7%  tradingeconomics).

The numbers show that China`s economy is increasingly driven by domestic demand & retail sales and loosening her dependency from exports. China is transforming into a modern service economy like the US, fostered by the technological progress (E-Commerce, Fintech). China´s ascent is also driven by the rapid urbanization. People are flooding into the big cites where the productivity is much higher than in rural areas. The huge country now has more than 100 cities of over 1 million residents, a number that is likely to double in the next decade, writes the Guardian (theguardian). The  urbanization creates 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 numbers also 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 2017 China had about $16,600 income per capita, the US number was $59,500 (cia.gov).

The swift retail growth also is raising China´ s importance for the global economy, which is increasingly fueled by Chinese imports. Forget the pundits!