Reuters
Tuesday , January 12th, 2010
Household income in China surged in the last six years,
especially for top earners, putting the country on track to eclipse the
United States as the biggest consumer market in a decade, Credit Suisse
said in a report on Tuesday.
The bank’s survey of 2,700 respondents showed a
big rise in property and car purchases, underscoring why many investors
are betting big on a rise in China’s consumer sector.
“The next big theme for China in the new decade is the rise of
private consumption, in our view,” said Dong Tao, China economist
with Credit Suisse in Hong Kong. “It is likely to provide a badly
needed source of spending for the rest of the world, promoting a global
rebalance of trade, consumption and growth.”
Based on growth in household income and estimates of economic
growth, he expects the share of China’s private consumption to
GDP to reach 23.1 percent in 2020, just surpassing the U.S. ratio at
22.9 percent. Critics accuse China of contributing to global economic
imbalances by saving too much. However, the amount that Chinese
consumers save relative to household income has dropped to 12 percent
in 2009 from 26 percent in 2004.
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