Hopeful Signs from China's Consumers

Posted by: Bruce Einhorn on October 7, 2009

China is in the midst of its eight-day holiday to celebrate its National Day. Golden Weeks like this (there’s another at Chinese New Year) provide many Chinese with the only chance they have to travel around the country and are therefore important indicators of the state of consumer demand in the domestic economy. And with so many economists saying the global crisis demonstrates the need for China to shift its economy away from its focus on exports and instead toward a greater reliance on consumption, this Golden Week takes on even more importance.

So how are things shaping up so far? Economists at BoA-Merrill Lynch have just come out with a report looking at the first few days of the holiday – and the verdict is upbeat. “So far, all statistics and anecdotal evidence point to robust consumer spending in the Golden Week despite strong headwinds,” write Ting Lu, T.J. Bond and Xiaojia Zhi. Some evidence: According to a Ministry of Commerce survey of 1,000 retailers nationwide, sales during the first three days of the holiday rose 15% year-on-year to $2 billion; electronics retailer Suning reported a 25.8% increase in sales in Beijing during the same time period and auto sales almost doubled in Guangzhou. And the Merrill economists are optimistic that the rest of the week will be a good one for retailers, too, arguing that many Chinese curtailed their shopping on October 1 to watch the big 60th anniversary parade in Beijing.

Reader Comments

Said Smith

October 7, 2009 8:38 AM

I love it when the U.S. and Europe encourages China to consume more. This is the biggest farcical economic analysis one wants to contemplate. Does the world need more polution and degradation. China has 1.5 billion individuals most of whom are illiterate, and we want them to consume more. What a joke! There is nothing wrong with consumerism as long as people consume responsibly with governments leading in the area of renewable energies, etc. If the Chinese consume more, then pray for our planet to survive for the next 100 years. We already see arctic meltdowns, torrential rains in the U.S. Europe, and particulaly Asia. What else?? I say: give me a break!!!!!!!!!111

DanTe

October 7, 2009 12:07 PM

I too have noticed an uptick in spending on luxury items by the Chinese. It appears that the rich are still rich and showing it off. I will have to see what happens to the masses. So far, they're still very very tight.

Squeezebox

October 7, 2009 3:19 PM

I think it's good that the Chineese workers are finally getting the life they've worked so hard for. It's good to make things for others, but it's even better to make things for yourselves. :)

George UK

October 7, 2009 9:20 PM

In answer to Said Smith, yes take a break
and during your break read up some research. China has 1.5 billion individuals most of whom are illiterate?, check out what nationalities are registered for degree,masters and PHD worldwide.
Does the world need more pollution and degradation. The USA has been the biggest polluter and still is and they have failed to change there ways since the Kyoto treaty 20 odds years ago.
In this BW issue you have report about the waste in the medical field this is on top of the waste in the auto industry.
Sort out your own back yard before criticising other countries.

Xiang Yu

October 7, 2009 9:36 PM

@Said Smith, Most of Chinese are illiterate? I think it is you who are illiterate. More than 93% of 1,3 billion Chinese are literate. Just because Chinese are over 1 billion, they can't become consumptive? It is never Chinese fault that the world is in the mess today. The pollution is caused by the westerners overconsumption. The global economic crisis is caused by the westerners' habit of consume more than they earn.

Husin O'Bama

October 7, 2009 11:35 PM

Spend, Spend and Spend until you break the banking system.

Mrs Smith

October 7, 2009 11:58 PM

Hi Dear Mr. Smith, it is always easy to blame somebody when there is something wrong. But could you please do a little bit research (or just facts) before you ever try to rush your opinion? Open your mind, read more and you may get a different conclusion. God bless you!

XY

October 8, 2009 9:16 PM

Sad Smith

You are the one who is illiterate. Do you speak French, Japanese and Chinese? I am willing to communicate with you in the 4 languages any time you wish.

You must be one of those who wear a string-vest, show naked buttocks and listen to blared music when reparing pavements in the neighbourhoods.

Man Chung Cheung

October 9, 2009 1:11 PM

Just to correct what Said Smith has said.

1) China's Literary Rate is over 90%
2) China's population is closer to 1.3 Billion

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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