Lewisian turning point impacts upon China demographics with India close behind, meaning sales opportunities in China exist as never before
Op-Ed Commentary: Chris Devonshire-Ellis
Mar. 27 – China is about to become a great market for international businesses to sell to. That’s quite a statement, and I can recall similar proclamations being bandied about 20 years ago during the early days of Deng Xiaoping’s reforms, and then 10 years later when China eventually joined the WTO. Yet, as many a wise man noted – unless you were in the chopstick business, there weren’t actually a whole bunch of affluent Chinese looking to buy goods and services. That is now changing. But why? Continue reading
Posted in Business, Economy and Politics, FDI and Foreign Trade, Manufacturing, Markets, Retail
Tagged Arthur Lewis, China Consumers, China Consumption, China Demographics, China Market, India Demographics, Lewisian Turning Point
Mar. 13 – As China gradually shifts its economy from an investment-led growth module to a more consumption-driven structure, be prepared to engage a more individualistic and emotional Chinese consumer in the near future, suggested a new study conducted by the international consultancy group McKinsey & Co.
In its report “Meet the 2020 Chinese Consumer,” McKinsey predicted that China’s GDP would grow 7.9 percent annually over the next 10 years and, by 2020, consumption would account for about 43 percent of China’s economic growth, compared with a forecast contribution of 38 percent from investment. Statistics from the firm show that investment currently accounts for 53 percent of the country’s economy. Private consumption will represent 39 percent of GDP by 2020 and government consumption will be 13 percent, the report added. Continue reading
By Vivian Ni
Mar. 8 – Consumer goods retailers and female-oriented service providers across China are competing to launch promotional campaigns and offer discounts today in a bid to attract more female consumption. At the end of this year’s “International Women’s Day,” they hope to harvest profits from the wallets of the country’s increasingly wealthy female buyers.
In fact, not only on this symbolic day, but in Chinese people’s day-to-day lives, spending by women has become a significant contributor to the “great Chinese consumption power,” a concept that is becoming the mantra for international businesses nowadays. According to a Nielsen survey in 2010, the consumer confidence of Chinese women aged between 30 and 39 achieved the same level of men in that age group, and there is a growing tendency that younger Chinese women are willing to pay more for their favorite items than men. Continue reading
By Julia Gu
Also included: Figures on Chinese tourists’ retail spending abroad
Feb. 9 – According to preliminary data released from China’s National Bureau of Statistics, retail sales of consumer goods totaled RMB18.12 trillion (US$2.88 trillion) nationwide last year, up 17.1 percent year-on-year. While growth was 2.2 percentage points lower than the increase in 2010, China’s retail industry is expected to remain relatively strong in the near future amid declining export demand and a cooling real estate market – aided largely by the country’s expanding middle class population. Continue reading
By Vivian Ni
Nov. 21 – The surging demand for wine in China has made the country one of the most important target markets for global wine producers, as regular Chinese consumers are now becoming more receptive to Western wine, and wealthy Chinese buyers are considering red wine as a new type of speculative investment to counter inflation.
Promising wine consumption market
While traditional wine consumption markets in the West are all declining amid the recent global economic woes, wine sales in China have been experiencing an impressive 15 percent annual increase over the past several years, according to estimates made by U.S.-based consulting firm A.T. Kearney (ATK). Furthermore, a report issued in September by U.K.-based International Wine and Spirit Research (IWSR) says that wine consumption reached 125 million 12-bottle cases in 2010 and is forecast to double to 250 million cases by 2016. Continue reading
Posted in Business, FDI and Foreign Trade, Retail
Tagged Bordeaux, China Beverage Market, China Dinghong Fund, China Speculative Investment, China Wine, China Wine Consumption, China Wine Futures, China Wine Market, China Wine Trading Center, Foreign Vineyards, Shanghai Wine Exchange
By Cory Lam and Vivian Ni
Sept. 1 – As regulations on representative offices tighten, the setting up of a foreign-invested commercial enterprise (FICE) is becoming an increasingly popular choice for foreign investors who want to engage in import and export, as well as domestic distribution activities in China. While it is critical for foreign investors to fully understand what they have to prepare exactly in order to successfully register a FICE with the related Chinese authorities, it is also equally important for most of them to apply for the general tax (value-added tax or VAT) payer status after the completion of FICE registration so they can realize genuinely cost-effective operations.
Why is VAT general taxpayer status important?
Article One of China’s “Interim VAT Regulations (State Council Decree No.538)” stipulates that all enterprises and individuals engaged in the sale of goods, provision of processing, repair and replacement services, and import of goods within China shall pay VAT, making VAT a matter of concern for most FICEs. Continue reading
By Nicholas Hughes
Jul. 15 – Among the permitted business activities a foreign-invested commercial enterprise (FICE) can conduct (besides retailing, wholesaling and commission agency activities) is franchising. The nature and use of franchising – and the business circumstances that affect it – have changed dramatically over the past three decades.
Franchising first emerged in China in the late 1980s. Today, despite a period of disordered development in its early years due to a loose legal environment and little local knowledge of franchising, China has the largest franchise market in the world.
In 2011, with the Chinese economy booming, franchising offers a low cost rapid growth model that provides easy access to the expanding consumer market and second-tier cities. Further, franchising enables faster brand recognition, drawing in consumers that see large brand name chains as being more reliable. Continue reading
Jul. 1 – The new issue of China Briefing magazine, titled Trading and Establishing Foreign-invested Commercial Enterprises in China, is out now.
While there has been a great deal of discussion about the macroeconomic trends surrounding and microeconomic thinking behind “the Chinese consumer” (and even whether this term is too generalized to use), the one word describing this demographic that all sources seem to agree on is potential.
It doesn’t take a PhD demographer or marketing guru to calculate that world’s largest population + rapidly rising disposable incomes + increasing tastes for foreign products = a rather enticing market for the foreign company. This little calculation is not new – though it is perhaps significantly more true now than several years ago – and it forms the central theme of hoards of business books and news articles. Continue reading