by Fons1 via FlickrContrary to what Western media report, China’s consumers are still going strong, writes Shaun Rein, director of the China Market Research Group (CMR) in Shanghai in Seeking Alpha. Consumers in the US might be in panic after so many lost saving of a life-time, Chinese consumers maintain a strong confidence in both their government and the country’s financial institutions.
While increasing unemployment for workers in the export sector is something that we all need to look at from a moral and humanitarian standpoint, from purely a business one they do not count much for GDP consumption growth. Their salaries unfortunately are too low. The media is intent on making this a bigger story than it really is, I believe, to sell papers with great headlines. There was one the other day in a top tier daily something like, “China Business Confidence at All-Time Low”.
Western media are wrongly projecting the fears at their home markets on China and its consumer middle class, Rein argues. The upcoming Chinese new year will be a moment to watch though:
Our research findings suggest that critical for the consumer sector is whether younger Chinese get the bonuses and salary increases during the Chinese New Year period that they expect. If they do not, expect retail sales to drop big-time in February.
But overall, consumer growth is going up very fast in China and Shaun Rein expects in 2009 a continued growth between 16-18 percent.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your conference, board meeting or panel? Do get in touch.