12-12-2007
Consumers, filling the gap
| China retail sales grew at annualized pace of 18.8% in the twelve months ending October 2007. Volume came in at roughly 810 Billion yuan or 110 Billion US dollar. That represents an average spending procapita of about 100 dollar a year, a meaningful number if one thinks that a great percentage of rural inhabitants live on a few dollars per day. A peak up in consumer spending might make Chinese economy more resilient to a possible downturn in exports growth, therefore convincing politicians to accelerate the pace of yuan appreciation. It remains to be seen how evenly is this surge in consumption distributed among different classes of Chinese society.Excessive disequality might lead to social tensions, that have been so far somewhat tamed by the last few years of economic expansion. |