Rosy New Year wish of consumers
Some media outlets deem China’s economic slowdown to be the top financial and economic news of 2015, as it hurt consumption worldwide. But Chinese consumers seem to differ. Two figures may explain why. One is that China’s online retail sales are expected to outperform the rest of the world by reaching 4 trillion yuan ($618 billion) this year. The other is that about 120 million Chinese traveled overseas in 2015, making China the largest source of overseas tourists in the world.
For most of the past three decades, China was known for its trademark robust growth and the unbelievable diligence of its workers. Rapid economic development not only brought prosperity to China but also fueled continuous growth around the world. And Chinese workers shone prominently across the world, prompting even the Time magazine to name them the Person of the Year in 2009 when the world economy was still struggling with the worst global financial crisis in about seven decades.
However, as the Chinese economy braces for the slowest growth in a quarter century, a sense of disappointment has arisen among those who have long counted on China as a key driver of global growth.
Concerns over the health of the world’s second-largest economy are justified. After the country’s growth slowed to below 7 percent in the third quarter of 2015, the Chinese authorities sounded the alarm against the rising stock of unsold homes, the lingering overcapacity of many industrial sectors and the rapid pileup of companies’ and local governments’ debts.
Domestically, people are anxious to know whether measures to eliminate overcapacity and excessive debt will cost too many jobs and spook the financial market. Internationally, investors are worried about the downward pressure China’s economic slowdown will create on commodity prices that have already plunged, causing financial difficulties for exporting countries.
But that China’s restructuring has caused its traditional growth engines of investment and exports to sputter alone should not generate too much pessimism. In fact, as China’s per capita GDP reached $7,500 in 2014, Chinese consumers’ eagerness to spend their hard-earned money for a better life has become increasingly evident despite income disparity remaining a major constraint.
If Chinese e-commerce giant Alibaba can persuade consumers to spend more than 90 billion yuan on the world’s biggest online shopping day onNov 11, China has the potential to become the world’s largest online retail market, although its overall share of consumption in the economy remains considerably low compared with developed economies having similar income levels.
A 20 percent increase in the number of outbound tourists in 2015 also points to a rising trend, which started in 1998 and has increased by nearly 13 times since. The impact of the rising number of tourists was evident at home, too, which sawmore than 4 billion journeys in 2015 that generated tourism revenue of over 4 trillion yuan.
Compared with the $10-trillion Chinese economy, these bright spots of growth may not be big enough. Yet the very potential of these markets and the consumer enthusiasm should warrant more confidence in China’s ongoing economic transformation to consumption-led growth.
These markets are far from perfect. The sales of poor quality or fake goods remain the Achilles’ heel of China’s online retail sector, preventing its sound development. Dissatisfactory services at tourist spots also are cause for concern.
But if Chinese people travel and shop more in the new year, there is no reason why policymakers should not do their best to improve regulation and services for consumers’ greater satisfaction.
And if Chinese consumers are happy to loosen their purse strings, should not those who fear the Chinese economy might suffer a “hard landing” take a second look at the model they used to gauge its evolving economy?
The author is a senior writer with China Daily. firstname.lastname@example.org