China – Consumption is the Key

August 27, 2018 |Author: Edward Kerschner, CFA | Categories: Chart of the Week, Emerging Markets

  • China shifting to consumption-based growth. China’s government has been trying to reduce reliance on traditional growth drivers such as industry, investment and exports and boost the contribution from consumers and services. As the chart shows, consumption is playing an increasingly pivotal role in China’s gross domestic product (GDP) growth, with consumption contributing 59% of China’s economic growth in 2017 and a trendline that has been increasing over the past decade.1
  • China consumers increasingly willing to spend. An improvement in personal finance expectations, a milder inflation outlook, strong job security and robust income growth has underpinned Chinese consumers’ willingness to spend.2

1 The small decline in 2017 versus 2016 reflects the growth in exports as the global economy rebounded. Exports contributed +9% to growth in 2017, compared to -7% in 2016. 
2 Credit Suisse – Emerging Consumer Survey 2018, March 2018.

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