The dip in China’s economic growth is caused by a more careful group of consumers, who face increased prices, tells retail analyst Paul French in the Globe and Mail. And the reduction in spending on luxury goods is here to stay for a long time, he adds.
The Globe and Mail:
Consumption overall is slowing not because of luxury goods, but because of the rising cost of living, forcing the middle class to save for their own future and that of their parents instead of buying their morning Starbucks and new clothes at the mall, said Paul French, chief China analyst with research firm Mintel. “It is a problem. It is continuing longer than expected,” said Mr. French. “Anyone who says how long this crackdown will go on is lying.”
More prudent Chinese consumers are just one of the new barriers for foreign firms entering the China market. The China Weekly Hangout discussed in January 2013 why foreign firms are failing so often, with panelist Richard Brubaker of Collective Responsibility and Andrew Hupert, expert on conflict management in China. Moderation: Fons Tuinstra of the China Speakers Bureau. Including references to Apple, Mediamarkt, Foxconn and many others.