China’s Booming Consumer Market to Empower the World
“The nation’s consumer marker is not only a major driver for its own growth but also a propeller for the world economy,” Yu Guangzhou, vice-minister of commerce said at the three-day China Development Forum.
China’s GDP expanded 11.4% last year, making it the world’s fourth largest economy. And according to the forecast made by the IMF, the nation was expected to overtake the US as the largest contributor to world economic expansion last year.
With the rising domestic consumption goes the nation’s increasing demand for imported products. Since its accession to the WTO, China’s imports have grown at an average of 26% annually. And in the first two months this year, the country’s imports ballooned by 3 billion yuan.
“China’s economy is now shifting to one driven by consumption,” said Yu. “Meanwhile, rising purchasing power of people means greater demand for high-end products.” China now takes up 23% of the world’s luxury market and is the biggest consumer of such luxury brands as LV and Bentley. Meanwhile, Chinese travels are expected to make 100 million trips abroad in 2015.
Although domestic consumption accounted for less than 50% of the nation’s total output, consumer spending has been growing at an average annual rate of 13.1% over the past five years. And as Yu put it, “Even if it grows at only 10% annually, China’s domestic consumption will grow 3.5 times to 30 trillion yuan by 2020.”
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