The world’s most populous country—with 1.4 billion people—is also one of the world’s most important consumer markets. The astonishing size and scope of the Chinese market presents a once-in-a-generation opportunity for companies and investors around the world.
To better understand the Chinese consumer market, consider these key facts that have made China such an economic powerhouse.
The world’s second largest economy.
China is second only to the United States, and its Gross Domestic Product (GDP) is more than double the next largest economy of Japan. What’s more, while China’s economic growth rate has “slowed” in recent years, with well over a 6% annual growth rate it is still expanding at more than twice the rate of the United States.
A growing middle class.
The middle class in the United States may be dwindling, but in China it is expected to nearly double over the next 5 to 10 years from 430 million to 780 million people. The rapid expansion in the middle class should drive a continuing surge of consumption growth for decades.
More discretionary income.
Over the past five years, disposable income per capita in China grew 48% and we expect this trend will continue. Chinese consumers are spending their newfound wealth on much more than life’s necessities – and much of that spending is taking place online. Over half of China’s population—721 million people—are Internet users, and the country now accounts for over 40% of global e-commerce transactions.
Chinese Consumer Trends May Impact Global Economies and Investors
The Chinese consumer is driving growth in many areas of the world’s economies. This is a major theme for our International Equity strategy. We believe opportunities to invest in the emergence and growth of Chinese consumer trends exist not only in China, but also around the globe with companies that sell into this market.
Our strategy targets companies in the emerging markets, Japan, and Western Europe that we believe are best positioned to capitalize on these trends. It’s an exciting future, and we think investors will be able to benefit considerably from the growth opportunity China represents. To learn more, read our white paper, If You Build It, the Chinese Consumer Will Come.
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