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2018 could be a very important year for the Chinese economy, with retail sales expected to exceed those of the United States this year. In the past, China’s economy has been largely supported by its manufacturing businesses, but now, there is a decline in manufacturing and an increase consumer spending and importing. Considering that China is the largest export economy for approximately 40 countries today, by the year 2030, many more countries may be relying on exporting to China. This includes the United States, who currently purchase almost 20% of China’s total exports. In fact, China currently buys over 20% of total sales from major companies such as Apple, Boeing, and General Motors. Many imports to China are coming from the United States, including approximately one out of every five cars sold in China. One factor that has contributed to the increased spending by Chinese consumers is the fact that there have been increases in their incomes.
Between 2010 and 2020, it is expected that the disposable income per household will double to approximately $8,000. This could potentially have major effects on many industries including healthcare, travel, and discretionary spending. According to Euromonitor, the health sector will see the most growth in the coming years, as the population will consist of 343 million people over the age of sixty, by the year 2030. Also, as Chinese citizens have increased incomes, many are traveling abroad or attending school in different countries, and the value of this market is expected to exceed that of the United States by the year 2025. Countries that are most popular to Chinese tourists, including many countries in Southeast Asia and Europe, can expect to see an increase in tourism coming from China. Lastly, the discretionary spending market is expected to rise in the upcoming years. From 2010 to 2020, discretionary spending is expected to rise 13.4%, followed by spending on semi-necessity items rising 10.9%, and spending on necessity items rising 7.2%.
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