(Drivebycuriosity) - If we believe the media then China is about to crash.
But the reality refutes the gloomy predictions. Last night we learned that China´s retail sales grew 9.2% in September, faster than in August & July (
retail).
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). The country has a huge natural resource which is fueling the perpetual
growth - a gigantic amount of human
capital: 1.3 billion people who are intelligent, who work hard
and who save money to achieve a better life. According to the World Bank
the Chinese save more than 40% of their income, the American just
around 20% (
worldbank).
High savings (capital accumulation) and a good education lay the
fundamentals for sustainable economic growth. Wikipedia counted in 2014
already "2,236 colleges and universities, with over 20 million students
enrolled in mainland China" (
wikipedia).
This fast expanding knowledge will drive science & innovations in the
future and foster economic growth.
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 $16,700 income per capita, the US number was $59,500 (
cia.gov).
Don`t underestimate China!
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