China Consumers Not Buying Enough Goods

Retailers and policymakers have high hopes for consumer spending in China driving profits and economic growth. And while on the rise, consumption is not getting there as fast as many had hoped, industry watchers say.

China is trying to rebalance its economy away from investment and exports towards consumption, which Beijing hopes will deliver more stable long-term growth for the world’s second-largest economy.

The problem, say strategists, is that China’s consumers remain elusive.

“China is still sitting there with the lowest consumption to GDP [gross domestic product] ratio in the region. Consumption is 35 percent of GDP and is a good 25 percentage points from where it should be,” said Paul Gruenwald, chief economist, Asia Pacific at Standard and Poor’s Ratings Services.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.