Japanese Media: The World is Concerned with China’s Economic Tendency with Expectation and Uneasiness
2016.11.25 Source: 转载 [ Print ] [ Close ]

According to the report on the website of Nikon Keizai Shimbun on Oct. 9th, the increasingly growing middle class of China has shown its prosperous purchasing desire. On the other hand, structural contradictions, such as the one between the weak economic growth and the excess production capacity of manufacturing, have been further fierce. The world is concerned with China’s economic tendency with expectation and uneasiness.

China’s consumption society is showing on the diversified development. Along with the rising income, middle class in large cities or even medium or small-sized cities has been growing increasingly, leading to the growth of leisure consumption such as tourism. Consumers’ consumption channels, such as cross-border e-commerce and CVs, have been also increased. Despite that the economic growth is lack of the strong momentum as before, China’s government is also trying to realize the economic mode transformation from investment orientation to consumption orientation.

It is reported that on a working day in late August, Parkson Shopping Center, located in downtown are of Anshan, Liaoning Province in northeastern China, was still full of consumers. At the counter of a French brand, female consumers were enthusiastic to select and purchase masks and body care products. Such a situation is worth concerning.

Anshan has been prosperous as the city of steel with a population about 3.6 million. However, it is a medium and small-sized third-tier city in China. Under the influence of the weak desire of infrastructure, steal industry, as the main industry, has to decrease its production, leading to the prominent economic slowdown. However, the crowded downtown area has demonstrated the current situation of Chinese consumption.

It is reported that China used the cheap labor force as its weapon to attract overseas investment, becoming the manufacturing economy as a “world factory”. Meanwhile, it has realized the rapid growth as the second economy in the world. Citizens living in Shanghai and other coastal big cities have enjoyed the rising incomes.

In 2015, China’s GDP per capita has reached about USD 8,000, ranking in the upper stream of middle income countries defined by World Bank. However, due to the moderate economic growth and rising cost of labor force, foreign investment in China has also been moderate. There is a huge gap between China and high-income countries with GDP per capita as USD 12,000. Subsequently, China may be trapped into the “middle-income countries trap”, before it becomes a high-income country.

Under such background, Chinese government has been changing its economic structure, to motivate its economy by stimulating consumption, just as Japan and America. While promoting the infrastructure investment targeted at eliminating the gap between the rich and poor in coastal areas and inland areas, China has also vigorously raised people’s income level. As a result, the middle class has been expanding in big cities, even in medium and small-scaled cities.

Between this January 2016 and August 2016, total retail sales of consumer goods (as detail market) increased by 10.3% compared to that of last year as RMB 21 trillion, maintaining a double-digit growth.

It is reported that along with the increasingly expanding middle class, consumers are becoming more mature, which has changed the blind consumption model of luxury products and other high-price products in the past. On the contrary, consumers start to enjoy the consumption suitable for their personal interests and preferences, with strong performance in tourism, film, sports and other entertainment and tertiary industry.

On the other hand, the manufacturing industry, including steel industry, is faced with the inefficiency and excessive capacity, which are not solved yet. If the layoff pressure of manufacturing industry further intensifies, it will exert a negative influence on the employment and income level that has been supporting the consumption. Do we need to settle the negative heritage from the rapid growth in the past to realize the sustainable consumption-oriented growth model? China’s economy is embracing an important inflexion.