China’s Consumption Challenge

Monday, August 24, 2009 2:32

For those who are looking to gain some insights into China’s consumers, I highly suggest watching this clip where Jonathan Woetzel asks four senior economists to comment on the following questions:

  • Why do Chinese consumers spend so little relative to counterparts in other nations?
  • What can be done to change that?
  • Is boosting private consumption in China’s national interest?
  • How would that contribute to global growth?

The answers, and the discussion in general hits on a lot of very important issues, perhaps the most important being:

1) 40% payroll taxes inside the city are suppressing job creation and consumption
2) Consumption is seen as the only way out of the current economic pothole, but the downsides of consumerism in China are huge
3) Increased consumption would lead to an externally interesting issue.. a reduction of treasury holdings.

It is a 15 minute clip that I think everyone will learn something from, and as I go into my first class at CEIBS, it is a clip that I feel highlights the struggle that China’s economy is going to have with the environment going forward.  That, when you have 4 separate economists all agree that the way forward cannot be supported by the resources available, it is a sign.

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3 Responses to “China’s Consumption Challenge”

  1. debbie says:

    August 24th, 2009 at 2:54 pm

    if the increased wages people would spend more

  2. Spellchecking says:

    August 24th, 2009 at 8:01 pm

    You need to spellcheck before you post. “Challendge”, “dicsussion”, you even spelled the guy’s name wrong. Both first and last. Sloppy.

  3. admin says:

    August 24th, 2009 at 8:20 pm

    @ Debbie

    Yes – I guess that would help. Unless of course, the increased wages caused price inflation… or was caused by inflation.

    @ Spellchecking

    All corrected.

    R