THE CHINESE CONSUMER IS ABOUT TO WAKE. Not necessarily because it wants to, but because it needs to. China’s ‘Purchasing Managers’ Index’ (PMI) dipped below 50 in September, at 49.8, indicating a contraction in the manufacturing sector. Meanwhile, over the past 10 years, the average Chinese household savings has risen from an average savings rate of 30 percent in 2005 to 50 percent in 2015.
…household consumption only contributes 35 percent towards China’s Gross Domestic Product (GDP)
And that’s why last month in Washington, China’s leader, Xi Jinping, voiced the Party’s commitment to opening its markets and completing a transition from export-driven growth to consumer driven expansion. In short, the Party has begun to shake the middle-class awake; a population that could surpass 854 million by 2030, according to ANZ Greater China economists Liu Li Gang and Louis Lam. More importantly, Liu and Lam believe this middle class will help move Chinese consumerism from 35 to 50 percent of the country’s GDP, and that’s exactly what the Party wants.
And what the Party wants, the Party gets. In contrast to Western politician’s election promises, the Party’s ‘Five Year Plans’ are not wish lists, but matter-of-fact commitments. Such is the benefit of maintaining ‘Socialist Market Economy’. The ‘sleeping giant’ is drowsy, but awake.
This is old news for some markets.
…the Party’s ‘Five Year Plans’ are not wish lists, but matter-of-fact commitments.”
Now, whether your business takes advantage of the awaking of the Chinese consumer depends on your first step. “The journey of a thousand miles begins with a single step,” said Chinese philosopher and poet, Laozi. That journey’s a lot easier with a team that’s already been in China for 15 years. So contact ClarkMorgan today to learn how to ‘Sell Big to China’.