Chinese Consumer Will be an Extremely Influential Factor in the Years Ahead

Yesterday, the Wall Street Journal said the United States was probably already in recession. Comes anecdotal evidence from a Dear Reader in New York:

“A friend who works at United Stationers – one of the larger office supply companies – tells us that there’s a noticeable slowdown. People are being given days off with no pay, etc.”

*** And here is our new friend David Fuller of Fullermoney with an insight:

“Despite China’s dependence on the ailing US, its economy continues to charge ahead. Recently, it was announced that China’s real GDP grew by a fantastic 11.2% in 2007. There is no doubt that China’s economy is booming and in 2007, its trade-surplus doubled when compared to a year earlier. Moreover, retail sales in China have been growing at 14% per annum for many years and in the past 12 months, total sales reached almost US$1 trillion. Interestingly, the number of US Dollar billionaires in China jumped almost 10-fold in the past year from 14 to 106 individuals. All of the above leads me to conclude that the Chinese consumer will be an extremely influential factor in the years ahead.

“Elsewhere in the region, India’s economy is also growing rapidly with real GDP growth clocking in at roughly 9%. Its industrial production has slowed down somewhat in the recent past but production of capital goods continues to soar.

“As far as the Asian region’s dependence on the US market is concerned, Singapore, Hong Kong and Malaysia are the most exposed to the American consumer. Their exports to the US are equal to roughly 20% of their GDPs, compared with only 8% in China and a miniscule 2% in India.

“Due to the slowdown in the West, exports to the US from Singapore and Malaysia have declined by roughly 15% from their peaks. Yet, it is worth noting that both these nations’ total exports have still managed to grow by 6% due to surging exports to Europe and the other emerging nations. This data suggests to me that we are slowly but surely moving away from a US-centric world.”

Bill Bonner
Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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3 Comments on "Chinese Consumer Will be an Extremely Influential Factor in the Years Ahead"

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Just thought to post a comment, not so much directlyrelated to this article, but one related to a Kevin Kerr article posted in today’s (12th March) US Daily Reckoning. The article is called “SHUTTING THE GOLDEN DOOR: NO ROOM AT THE INN”. There were a couple of comments from Mr. Kerr I’d like to elaborate upon. These qutoes were: 1) “…and even the planet, cannot sustain so many people” 2) “The simple fact of the matter is the world’s resources – not just oil – are dwindling faster…” I totally disagree with the first comment, and the second comment is… Read more »
Anonymous Guy

>”exports to the US are equal to roughly 20% of their GDPs, compared with only 8% in China”

Yes, but much of China’s exports to other Asian countries are actually destined to be exported on to the United States. China’s dependence on the US export market is largely under rather than over-estimated. Also, it remains an open question whether Chinese exports to Europe will remain solid in the event of a broader US recession which will hurt European consumers and their own ability to contribute to Chinese growth.



Population growth plus industrialisation equals resource depletion, that’s basically it. If the population of the US wasn’t increasing, its comsumption of oil wouldn’t be going up either. Unless you like living in an overcrowded country on 2 dollars a day, and I sure don’t want to try, we have to limits are numbers, and the best way of doing that is for countries to limit immigration. This puts pressure on third world countries who have too many kids to have less, and for western couples in countries like Italy to have more.

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