The Herman Trend Alert|
July 22, 2009
China---The Awakening Giant
We have long realized the magnitude of the Chinese consumer market. The population of China is over 1.3 billion and every year another 12 million babies are born. With this population and growth, it is easy to understand why companies like Microsoft and other tech giants are so interested in investment there.
China just surpassed the United States as the world's biggest auto market. The China Association of Automobile Manufacturers reports that responding to the government's slashing of sales taxes on small vehicles, Chinese car sales surged by 48 percent last month, compared to a year ago. More than half of the world's 50 largest retailers have launched businesses in China. Included in this list are Carrifour, Metro, and Wal-Mart.
Driven by domestic consumption and a strong increase in industrial activity, in the three months ending June 30, China's gross domestic product expanded by 7.9 percent (from the previous year). According to Chinese government data revealed Thursday, the growth rate was higher than the 7.7 percent expansion economists expected. This increase marked a sharp acceleration from the 6.1 percent growth recorded in the first quarter. Clearly, China may already be the fastest-growing market on the planet.
The Chinese government projects its GDP will grow 8.3 percent this year, according to a report released by the Chinese Academy of Social Sciences (CASS), the government's official agency.
Based on recent conversations with the Obama Administration, China has reached a point where it has assumed a more active role on the international financial stage. The onset of the global financial crisis provides the context for the decline of US economic power and illustrates the extent to which it has become dependent on China for the continuation of its global financial hegemony.
Add to this situation the fact that, according to a symposium of experts held in Washington on September 20, China's economy continues to expand. In spite of its overpopulation and unemployment challenges, especially in the rural areas, expect China to grow significantly as a market and trading partner in the coming months and years. The size of its market is enormous.
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