Voices of the world: How will world economy benefit from strong Chinese consumption?
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E-mail Xinhua, March 7, 2014
China's strong consumption is a boon for world economic growth, especially at a time when the shadow of the financial crisis still lingers.
People from all walks of life in various countries shared their experiences and opinions on the "Chinese consumption" with Xinhua reporters during what's known as China's "two sessions" - the annual sessions of the country's top legislature and political advisory body.
They believe that strong Chinese consumption can help start the process of global economic rebalancing by promoting industrial transition and upgrading, and have a positive impact on employment and growth worldwide.
The highlights of the interviews are as follows.
DIALOGUE 1
Xinhua: What does the Chinese market mean for local employment and people's livelihood? What impact does it have on your life?
Karl Ye, Managing Director at GMP Pharmaceuticals, New Zealand, said that his company used to focus on the East Asia market, on countries such as Japan and South Korea, but now China has become their VIP customer and some of the company's products are developed and made especially for Chinese people.
"For me, China means opportunities and future," Ye said, explaining that his company provides premium health products for Chinese people, and that they hold the key to the company's survival and growth.
Sandra Liu, Marketing Program Manager at Fortescue Metals Group, Australia, said her company has a huge Chinese customer base. "You can imagine what Chinese consumption means for me as ninety percent of our company's iron ore will be transported to China."
"In fact," said Liu. "The Chinese are not only consumers but also investors."
Liu said that over the last decade, China's demand for iron ore brought many employment opportunities, promoted local infrastructure construction and stimulated the development of many other industries such as consultation and financial services.
DIALOGUE 2
Xinhua: Are you well prepared to make the most of the "Chinese dividends" as more and more Chinese travelers are heading overseas? In what way can you benefit more from the Chinese tourists?
Gary Crokett, President of the Accommodation Association of Australia, shared his views with Xinhua at a hotel in Beijing.
"If this hotel could provide guests with bread and cheese and English-speaking attendants, then foreign hotels could also offer Chinese food like fried dough sticks and soybean milk and services in Chinese."
Crokett said it is a shame the service standard in some countries still fell short of the demand of Chinese visitors. "It is important for Chinese visitors to 'do as the Romans do' at other countries, but to do business you have to respect and care for your customers first."
Crokett thinks it is necessary for overseas businesses to get some systematic training of the diet and living habit of Chinese tourists, and adjust their business strategy to it. They could also enhance their cooperation with Chinese tourism to share the dividends, suggested Crokett.
In fact the Chinese have already started their investment in overseas tourism, which might lead to the restructuring of the tourism industry in some countries, said Crokett.
DIALOGUE 3
Xinhua: From low-end products to high-end brands, from demanding goods to service, the Chinese are quietly upgrading their consumption level and structure. How do you evaluate the influence brought about by this upgrade?
Michael Andrew, Global Chairman of KPMG International said that such changes are in accordance with China's shift from an export-oriented economy based on manufacturing to a mature economy that relies more on service industry and domestic demand.
The consumption demands of organizations as well as individuals are becoming more and more oriented to brand, service, and credit, which could bring more business opportunities for professional accounting service providers like KPMG, said Andrew.
With the service trade surging between China and other countries and a more open Chinese service sector, Chinese clients will have access to more professional and efficient products. Foreign organizations could also share more benefits from the Chinese markets.
DIALOGUE 4
Xinhua: For a long time, the European and American people have been deficit-spending, and the leverage ratios are high, while people in East Asia are comparatively conservative with a higher saving ratio. The phenomenon has been interpreted by some as one of the causes for the imbalance of the global economy. What effect do you think China's expanding consumption will have on the global economy?
Guo Shengxiang, a renowned Australian economist, thinks it is a very general economic question and depends on how the East and West reposition their economic relations in the post-crisis era.
"China's large-scaled urbanization and the rising of China's middle class will boost the consumption in China, and increase the demand for education, tourism, agriculture and service," Guo said.
If China, together with other countries, could grasp this opportunity to enhance their cooperation in trade and investment, a steady and balanced growth trend could be created.
"If we make good use of the consumption leverage, we may forge a completely different regional economic and trade pattern, which could promote different parties in the game to resolve disagreements and realize mutual benefit," Guo said.
DIALOGUE 5
Xinhua: For quite some time, Americans and Europeans have been used to excessive spending by borrowing, while in East Asia, people adopt a more conservative approach to spending and remain more inclined to saving. This is sometimes deemed as a cause of global economic imbalances. How would you like to comment on the implications of China's expansion of consumption on rebalancing of the world economy?
Stephen Roach, a senior fellow at Yale University and former chairman of Morgan Stanley Asia, said he is expecting China's further reforms such as boosting consumer demand and wider opening up to foreign investment, which will benefit both China and the world.
"If you look at the structure of China's economy in the last two years, the services industry has grown by 3 percent to 46 percent of the GDP, larger than the combined share of manufacturing and construction for the first time in modern China's history," he said.
He pointed out if the target reflects the new economic model, which is driven more by services and eventually consumer demand, it is a good number for China.
Moreover, the economist believes that stronger purchasing capabilities of Chinese consumers would benefit other countries as well.
"China is already the third largest and most rapidly growing export market, so China's growing consumer demand could be an important growth opportunity for American companies, not just in the manufacturing area but also the services sector," he said. Endi
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