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Markets Live: Miners pull ASX higher

12 January 2018 2:59 AM
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Markets Live: Miners pull ASX higher

The mighty force of consumerism has taken hold in China. In 2018, retail sales in China are expected to equal or surpass sales in the United States for the first time, another definitive marker in China's rise to economic superpower status.

The growth of China's domestic retail market is luring everyone from automakers to make up companies that want to cash in on the country's growing middle class, but it also serves as another complication in President Donald Trump's quest to transform US-China trade.

Retail sales in China are on track to hit just over $US5.8 trillion ($7.4 trillion) this year, according to Mizuho, a Japanese bank. It's a stunning rise from a decade ago, when retail sales in China were a quarter of those in the United States.

China's rapidly growing middle class has been eager to buy brand-name clothes, cars and cellphones, among other products. Shanghai is now referred to in fashion circles as "Paris of the East."

Their spending habits have been supported by fatter paycheques, with China's income per capita jumping from about $US2000 a year a decade ago to over $US8000 a year now.

"China's best bargaining chip is its massive and fast-growing domestic market," says Jianguang Shen, chief China economist for Mizuho, who pointed out the retail trend in a recent presentation in Washington, DC.

"This will change the balance (of power) tremendously, as it is first time when the US is dealing with a market of equal size in a potential trade war."

Also read: Ben Simmons jersey sales rocket into the NBA's top 10

Source: theage.com.au

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