February 25, 2013

The Chinese middle class is born. And the economy is changing

Economy

The Chinese middle class is born. And the economy is changing - Alessandro Benetton blog

Have you seen the bizarre masks that many Chinese people wear on the beach? According to local tradition, people with suntans are those who do humble manual labor out in the sun: so people cover their faces on the beach to maintain the ‘status’ derived from their pale skin.

This rather curious fashion actually indicates a much more important novelty: as the images of crowded beaches show us, internal Chinese tourism is already a reality. The galloping economic growth that China has experienced in the last few years has created a real middle class. Hundreds of millions of individuals who, thanks to the growth of their earnings and salaries, now have the resources to travel and discover their enormous country, feeding a tourist industry that promises to grow exponentially in the course of the next few years.

Once again, then, we find ourselves discussing a revolution in the Chinese economy, and consequently also in the global economy. In this case, I believe that we can look forward to positive effects for Western markets too.

The rising living standards and increases in internal consumption will seemingly lead Chinese producers to concentrate their efforts on a local market that is growing fast, reducing the exports of the low cost goods that have so often put our industries into crisis. And vigorous internal demand will make China an even more attractive market for Europeans.

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