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1 post from August 2010

China Passing Japan as the 2nd Largest Economy in the World

In the second quarter of 2010, China replaced Japan as the 2nd largest economy in the world, trailing the U.S. It is a historical moment. However, people in the West are more concerned or skeptical than happy about this milestone China has accomplished. One of the most turned-to argument is that China is not a consumption country, whose growth relies heavily on low-margin export, as a result, not sustainable. Just to point out a few facts: China has become luxury brands' most important market, such as LVMH, Hermes, Swatch, Mercedes, Ferrari; China unseated the U.S. as the largest car market in the world; Hong Kong, known as a Shopping Heaven, has benefited from all the shoppers from mainland China in the past decade. Traveling to China on a regular basis, I am dumbfounded to see how packed restaurants and shopping malls are, from first-tier to second-tier cities in China. To say that Chinese does not consume is generalization. The older generation, 60 years and up, tends to be "stingy". The memory of those poor and struggling old days is still fresh in their mind. However, those between 35-55 believe in hard work and saving some money, but they are not... Read more →