Economic Insight: Will the Chinese consumer save the World?

  • Three Cs to make China the #1 Consumer: Consumerization and income growth from smart industrialization, successful currency internationalization, and strategic cooperation and influence building.

 

  • The main winners from the rise of the Chinese consumer are: (i) producers in the US, Western Europe and industrial Asia (Singapore, Japan) of consumer goods for China’s middle class; (ii) commodity exporters in Russia, Central and East Asia, and Oceania as One Belt One Road reduces transaction costs; and (iii) competitive suppliers in ASEAN and South Asian countries fit for China’s Manufacturing 2025.

 

  • There are three risks to this projection: (i) a disorderly credit crisis in China; (ii) a negative demand shock from the US; and (iii) regional political escalation.