Chinesepod - Chinese consumer goods market to rank 2nd by 2015

BIZCHINA / Top Biz News

Chinese consumer goods market to rank 2nd by 2015

(Xinhua)
Updated: 2007-03-24 10:07

China will overtake Japan, Germany, Britain and Italy to become the
world's second biggest consumer goods market behind the United States by
2015, according to the findings of a survey by Credit Suisse, one of the
world's leading investment banks.

The Swiss-based bank estimates that Chinese consumption will account for
14.1 percent of the total consumption among major economies in 2015,
while the U.S. consumption will account for 37.7 percent.

Credit Suisse classifies major economies as the United States, Japan,
Germany, Britain, Italy, France, Spain, Canada, Mexico, Brazil, the
Republic of Korea, Australia, India and Russia.

China's consumption accounted for 5.4 percent of total consumption out of
the major economies in 2006, ranking joint fifth with Italy, with the
United States at 42 percent, Japan 11.1percent, Germany 7.3 percent and
Britain 6.6 percent, according to Vincent Chan, Head of China Research
with Credit Suisse.

Chan said that the proportion of Chinese consumption would grow to 8.6
percent by 2010 to be ranked third after the United States and Japan. And
the figure is estimated to be 21.8 percent by 2020 when the United States
is estimated at 34.6 percent.

The estimations have been made on the basis of a survey of China's
consumer market conducted by Credit Suisse in 2006.

The survey was carried out among 2,700 respondents in eight major Chinese
cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Wuhan, Xi'an and
Shenyang.

The survey revealed that despite strong economic growth - the GDP growth
rate was reported to be 10.7 percent, the budgeted and actual spending on
many consumer items, except property, declined in 2006 compared with the
previous year.

The bank attributed the seemingly inconsistent finding to two factors:
consumers holding back in anticipation of further price decreases for
many items, including automobile and electronic products, and the
relatively slow growth in personal income.

The survey also found that personal income grew at a slower pace when
compared with GDP growth, profit growth of the nation's enterprises and
government tax revenue growth.

Only the income growth for 20-29 year-olds and 30-39 year-olds could keep
pace with the growth of the national economy.

However, with the continued rapid growth of the Chinese economy, the
increase of the country's population and accelerating urbanization, the
bank held that there would be a continuous rise in consumption as the
proportions of total consumption from Japan, Germany, Britain and Italy
continue to shrink in the future.

As one of the world's leading banks, Credit Suisse provides its clients
with investment banking, private banking and asset management services
worldwide. Credit Suisse is active in more than 50 countries and employs
approximately 40,000 people.

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