18-10-2015, 11:06 PM
China’s next boom tipped to be led by retail spending
Scott Murdoch
[Image: scott_murdoch.png]
China Correspondent
Beijing
[Image: 477947-f9838c50-73dc-11e5-b19b-c7bb6212b90a.jpg]
Retail consumption in China is expected to rise sharply in the next five years Source: Supplied
[b]In Beijing’s fashionable Sanlitun district last week Mrs Wang, 34, was shopping and unknowingly part of China’s emerging rich.[/b]
ANZ and Credit Suisse have forecast that retail consumption will grow strongly in China over the next few years, effectively providing the next leg of growth and replacing the export boom that has driven the economy over the last decade.
Retail spending will make up a strong part of the China’s GDP numbers, released today, and economists and investors will be watching how much consumption has risen in the past few years.
China likely grew at its slowest pace since the depths of the global financial crisis in the third quarter, an AFP survey of economists has found, confirming investor fears following stock market turmoil and a currency devaluation.
Signs that the world’s second-largest economy — a key driver of global growth — is struggling will add to pressure on Beijing to do more to head off a hard landing.
Output rose an annual 6.8 per cent in the July-September period, according to the median forecast in a poll of 19 analysts.
That figure would be the worst since early 2009 and follows a raft of weak data that has fanned concerns Chinese growth is slowing sharply. The Credit Suisse report, published last week, said China’s next consumer boom would be driven by people aged between 20 and 35, who are effectively independently wealthy because they are working and perhaps live at home.
Mrs Wang was outside Uniqlo, the Japanese retailing chain, last week waiting for the store to open so she could return a purchase but said she liked to shop. “I don’t like shopping online, because I can’t try the clothes on so it’s hard to find suitable ones,” she said.
“I have found that the prices of clothing in China keeps going up and up but it hasn’t stopped me from buying clothes.
“I don’t buy luxury items, but just clothes I can wear ever day.”
Song Meyu, 32, was shopping in the area at the time and said she too was still buying despite the higher prices. Inflation in China during the third quarter rose 1.6 per cent, but prices were mainly driven by higher food costs.
ANZ last week forecast that retail consumption could almost double, but in Beijing dozens of malls and shops are facing tough times. A major supermarket in Dongzhimen, an area with expats near the Australian embassy, closed within two weeks of opening and a number of shops around it have closed.
Ms Song said she was keen to spend but hesitant to do it online.
“Online shopping is convenient but I can’t try clothes on,” she said. “The prices now are nearly double what they were in the past but that does not stop me, I still like to go shopping.”
Another young woman, Miss Liu, 23, said shopping was a necessity despite the higher prices. “The prices are soaring but for me clothing and shoes are vital,” she said. “I usually go shopping two or three times a week and spend maybe 200 yuan ($45) each fortnight on clothing. I live with my parents and spend my salary on stuff. I don’t have many cost-of-living pressures.”
Independent Chinese retail analyst Lai Yongjun said traditional outlets like malls were suffering because of the strong growth in online retail across China. “The economic situation has made things worse,” he told The Australian.
“Retail consumers are more prudent so consumption across the board has been affected.”
China has already cut interest rates five times in a year and slashed the amount of cash banks must hold to boost lending, but that stimulus has yet to be seen substantially driving real economic growth.
Additional reporting: Wang Yuanyuan, AFP
- THE AUSTRALIAN
- OCTOBER 19, 2015 12:00AM
Scott Murdoch
[Image: scott_murdoch.png]
China Correspondent
Beijing
[Image: 477947-f9838c50-73dc-11e5-b19b-c7bb6212b90a.jpg]
Retail consumption in China is expected to rise sharply in the next five years Source: Supplied
[b]In Beijing’s fashionable Sanlitun district last week Mrs Wang, 34, was shopping and unknowingly part of China’s emerging rich.[/b]
ANZ and Credit Suisse have forecast that retail consumption will grow strongly in China over the next few years, effectively providing the next leg of growth and replacing the export boom that has driven the economy over the last decade.
Retail spending will make up a strong part of the China’s GDP numbers, released today, and economists and investors will be watching how much consumption has risen in the past few years.
China likely grew at its slowest pace since the depths of the global financial crisis in the third quarter, an AFP survey of economists has found, confirming investor fears following stock market turmoil and a currency devaluation.
Signs that the world’s second-largest economy — a key driver of global growth — is struggling will add to pressure on Beijing to do more to head off a hard landing.
Output rose an annual 6.8 per cent in the July-September period, according to the median forecast in a poll of 19 analysts.
That figure would be the worst since early 2009 and follows a raft of weak data that has fanned concerns Chinese growth is slowing sharply. The Credit Suisse report, published last week, said China’s next consumer boom would be driven by people aged between 20 and 35, who are effectively independently wealthy because they are working and perhaps live at home.
Mrs Wang was outside Uniqlo, the Japanese retailing chain, last week waiting for the store to open so she could return a purchase but said she liked to shop. “I don’t like shopping online, because I can’t try the clothes on so it’s hard to find suitable ones,” she said.
“I have found that the prices of clothing in China keeps going up and up but it hasn’t stopped me from buying clothes.
“I don’t buy luxury items, but just clothes I can wear ever day.”
Song Meyu, 32, was shopping in the area at the time and said she too was still buying despite the higher prices. Inflation in China during the third quarter rose 1.6 per cent, but prices were mainly driven by higher food costs.
ANZ last week forecast that retail consumption could almost double, but in Beijing dozens of malls and shops are facing tough times. A major supermarket in Dongzhimen, an area with expats near the Australian embassy, closed within two weeks of opening and a number of shops around it have closed.
Ms Song said she was keen to spend but hesitant to do it online.
“Online shopping is convenient but I can’t try clothes on,” she said. “The prices now are nearly double what they were in the past but that does not stop me, I still like to go shopping.”
Another young woman, Miss Liu, 23, said shopping was a necessity despite the higher prices. “The prices are soaring but for me clothing and shoes are vital,” she said. “I usually go shopping two or three times a week and spend maybe 200 yuan ($45) each fortnight on clothing. I live with my parents and spend my salary on stuff. I don’t have many cost-of-living pressures.”
Independent Chinese retail analyst Lai Yongjun said traditional outlets like malls were suffering because of the strong growth in online retail across China. “The economic situation has made things worse,” he told The Australian.
“Retail consumers are more prudent so consumption across the board has been affected.”
China has already cut interest rates five times in a year and slashed the amount of cash banks must hold to boost lending, but that stimulus has yet to be seen substantially driving real economic growth.
Additional reporting: Wang Yuanyuan, AFP