Chinese Consumerism Shapes Global Economy

10/15/2015
Chinese consumerism will shape the worlds economic future | The National
Chinese consumerism will shape the worlds economic

future
RichardLi
May5,2014 Updated:May20,201402:57PM
Related
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makerstosetupfactories
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Chinesetouriststo
streamintoDubaioverthe
nextdecade
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AbuDhabitohost
ChineseVisitorSummit
Dubaithirdmostpopular
destinationamongwealthy
Chinesetravellers
LI, R. (2014, May 5). Chinese consumerism will shape the world's

economic future.
The National.
Chinaseconomy,boostedbyawaveofgrowingmiddleclasswealth,is
undergoingasignificantshiftinconsumption,drivenbyanewgenerationof
young,prosperousandindependentconsumerswhoareupwardlymobile,
lesspricesensitiveanddeterminedtodisplaytheirworldlinessthroughwell
consideredconsumption.
Today,Chinaseconomyisstillheavilydependentoninvestmentforgrowth
consumptionaccountedforonly50percentofGDPlastyear,significantly
lessthanintheUnitedStatesatmorethan80percentorevenIndia,where
thefigureexceeded70percent.
TheChinesegovernmentisnowactivelyencouragingmoreconsumersto
spend.ConsumptioninChinawillaccountfor60percentofGDPby2020,
accordingtoIDCsreport,addingjustunder$1trillionofconsumerspending
evenattodayslevels.
Amassivepushtourbanisewillpropeltensofmillionsofpeopleandbillions
ofyuanintotheconsumptionequation.Theeasternregioniscurrentlyhome
tothemostaffluentconsumers,particularlythetieronecitiesofBeijing,
Shanghai,GuangzhouandShenzhen.Ithasthehighestpercapitaretail
consumptioninChinasinceithasthecountryshighestaveragewagesas
wellasrobustspendingbytourists.
Theeasternregionspositionwillnotbeshrinking,butthegeographiccentre
ofChinasmiddleclassisalsoshiftingbecauselessdevelopedinland
provinceshavegrownfasterthanrichcoastalregionsandnowaccountfor
49percentofGDP.
ThegrowthofChinasmiddleclasshasunleashedawaveofaspirations
qualityoflife,thebesteducation,asecureretirement.Retailinvestorswill
seekamorediverserangeofwealthmanagementproducts.Otherareas
thatpresentopportunitiesasChinasconsumersocietydevelopsinclude
tourism,luxurybrandsandtechnology.
EmergingtrendsintradebetweentheMiddleEastandChinapointtoan
arrayofmutualbenefitsasconsumptionsurgesinthesefastergrowing
markets.ThebulkofMiddleEastexportstoChina,theworldslargest
energyconsumer,willcontinuetobedrivenbyoil.However,tradefromthe
Gulfisexpandingintoothercommoditiesandconsumergoodsunderscoring
theopportunitiespresentedbyincreasedaffluenceandgrowingdemand
amongChineseconsumersintheMainland.
ForexampletradebetweenChinaandtheUAE,expectedtoreachUS$100
billionbynextyear,coversawealthofsectors.Chinaexportsmachinery,
mechanicalappliancesandmanufacturedgoodstotheUAEwhileitimports
plastics,textilesandvegetablefatsaswellasaviationservicesandtourism.
Chinaalreadyhastheworldslargestnumberofoverseastouristsandthe
largestproportionoftouristspending,andisstillfarfromreachingitsfull
potential.Chinesetouristsmadeanestimated98milliontripsabroadlast
http://www.thenational.ae/business/economy/chinese-consumerism-will-shape-the-worlds-economic-future
1/7
10/15/2015
year,spendingmorethan$120bnontravel,whileChinaalsohad3.3billion
domestictourists,spending2.6trillionyuan(Dh1.52tn)aroundthecountry.
WeexpectoutboundtravelfromChinatoreach130millionbynextyear,
andpossiblytop200millionby2020,threetimesthecurrentnumberof
departuresfromtheUnitedStates.
Weexpecttoseemoreindependenttravellersspreadoutfromtraditional
touristspotstonichemarkets.Theirtoppreferreddestinationsincluded
HongKong,Europe,theUSandJapan.
ButChinesetouristsarealsoontheriseintheUAE,with275,675visiting
Dubailastyear,anannualgrowthrateof11percent.
Withdigitaltechnologybecomingapartofeverydaylife,weseeanewtrend
ofChinasconsumptionboommovingtotheweb.Chinahasbecomethe
worldsbiggestecommercemarketwithaspendingforecasttoreach
$540bnnextyear.
Astheworldsbiggestmanufacturerandconsumerofsmartphones,itwill
soonbethelargestmobilecommercemarket.Theseallplayarolein
increasingdomesticconsumptionthatwilldrivefurtherdevelopmentand
economicgrowth.
ThefutureoftheglobaleconomywillbeprofoundlyshapedbyChinaspush
towardsconsumerism.LocalandmultinationalfirmsinChinaneedto
possesstheabilitytogeneratesoughtafterconsumerexperiencesandbe
agiletomaintainthepacewithrapidlychangingtrends.
RichardLiistheheadofretailbankingandwealthmanagementatHSBC
BankChina
FollowusonTwitter@Ind_Insights
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10/15/2015

Chinese consumerism will shape the worlds economic

Abu Dhabi to host

Take Dubai real

2.European-style Palm Jumeirah villa

1.Dubai South set to become one of

5.Improving property yields make

Artists sneak 'Homeland is racist' jibe on to

Residents of besieged Taez look to coalition

Hoverboards: A fad that may go off

War Machine casting call: my battle

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