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China's domestic consumption grows steadily
07
Mar '16
Hidden amongst the rhetoric of China's overall GDP numbers, and the fact that consumption has risen this year while investment has fallen, is a more sanguine piece of evidence: consumption in China has actually been growing at a pretty steady rate for the last few years despite GDP growth slowdown, the China-Britain Business Council (CBBC) has said in a report.

“While headline real GDP growth has declined from around 10per cent after the global economic crisis to around 7 per cent last year, the consumption portion of overall GDP growth has steadily averaged 4.6 per cent over the same period – culminating with the actual figure of 4.6 per cent for 2015. This means that even if the cynics wish to strip out the investment growth they do not wish to credit, the world's second largest economy is still growing at a healthy 3.5 per cent – 5 per cent per year of pure, raw consumption – aka “good growth”.

“This “good growth” alone resulted in an annual incremental addition to Chinese buying power of about half a trillion US dollars in 2015, which as a standalone figure sandwiches China neatly between Norway and Austria as the world's 28th largest economy in nominal terms and 27th (just above the Netherlands) on PPP,” CBBC said.

Most developed countries would be desperate for such numbers, and the evidence of ongoing Chinese consumption is all around us, not least empirically through national trends and events such as this year's record-setting Singles Day shopping spree. Additional spending power is still growing rapidly year on year, not slowing, something frequently forgotten,”.

China's consumption power is not concentrated on small elite groups or the urban middle class; instead, figures show that the majority of Chinese consumers show a growing passion for consumption, which is expected to continue absorbing global products.

The report called on overseas enterprises and investors to learn about the Chinese market, saying it can still provide enormous opportunities to enterprises that manufacture quality products even confronted by reform and development challenges. (SH)

Fibre2Fashion News Desk – India

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