Special
Report: Global Financial Crisis
BEIJING, May 4 (Xinhua) -- Kirk John-Williams registered a cosmetics
trading company in China only three months ago. Although the world economy has
been affected by the financial crisis, the Trinidad and Tobago businessman is
confident in the Chinese consuming market.
"The financial crisis won't have too much impact on Chinese consuming
market. The upper class may have been affected by the economic downturn, but
most people from middle class are not badly hit. Chinese consumers are still
willing to spend," he said.
Economists believe China's exports may recover later this year. The most
effective means to spur economy at the moment should be stimulating domestic
consumption.
"China should have learnt a lesson that an export-oriented economy is not
sustainable. Stimulating domestic consumption will not only spur the economy,
but also meet the needs of the general public," a researcher from China National
School of Administration, Ding Yuanzhu, told Xinhua.
China's economy rose 6.1 percent year on year in the first quarter.
Consumption contributed more than 4 of those percentage points, retail sales
during the same period increased by 15.9 percent. Urban residents' disposable
income rose 11.2 percent and rural residents' rose 8.6 percent.
Chinese consumers are less pessimistic on economy than other countries'.
According to a survey by Nielsen of 50 countries and regions, only 35 percent of
Chinese people believed the domestic economy was in a contraction. The figure
was the lowest among the 50 world markets.
The survey report said Chinese consumers were "willing to spend and feel
that the next 12 months would be a good time to buy things they needed."
"Chinese consumers still have strong confidence on economy. People are
still willing to travel, spend money on clothes and buy advanced technologies.
This is a young but energetic group," Neilson's Vice Chair Susan Whiting said.
The Neilson contributed the confidence to the 4-trillion-yuan (585 billion
U.S. dollars) stimulus package and abundant domestic deposit.
In the auto market, stimulus packages are taking effect. Auto sales showed
strong signs of recovery after the country cut purchase taxes for small
engine-sized cars and rolled out detailed stimulus package for auto sales in
rural areas.
According to the China Association of Automobile Manufacturers, auto sales
topped 2.64 million units in the first quarter, up nearly 6 percent year on
year. The quarterly sales overtook the United States for the first time to
become the world's largest auto market.
Ye Zi, who has been working in Beijing for nearly three years, just bought
a 1.6 liter car which cost her more than 100,000 yuan.
"In such a big city, driving a car would be a lot more convenient. I can
afford a car now, and the government reduced the purchase tax for small cars, so
I bought it," she said.
Echoing the recovering auto market, the 13th Shanghai International
Automobile Industry Exhibition, which ended on April 28, became an auto fest for
carmakers.
Floor areas for the exhibition hit a record of 170,000 sq meters this year.
More than 1,500 auto and auto part companies, including those from China, the
United States, Germany and Japan, took part in the exhibition.
"Automakers are cutting funds for auto exhibitions across the world, but
the Shanghai exhibition is an exception. If they only have budget for one
exhibition, that will be the Shanghai exhibition, because China is the only
growing auto market in the world," vice president for the Shanghai International
Exhibition Co., the organizer, Lu Ren said.
During the 9-day show, more than 600,000 visits were made. Some high-end
brand cars, such as Rolls-Royce and Bentley, were sold out on the media day
before the exhibition started. The Chinese market has become the most important
for automakers across the world.
According to Volkswagen's first quarter report, China has overtaken Japan
to become Bentley's fourth largest market. Last year, Bentley's sales in the
global market fell 25 percent year on year, but rose from 318 units to 518 units
in China, up more than 60 percent.
In addition to auto markets, home sales in the first quarter also showed
positive signs.
At April's Beijing Spring Real Estate Trade Fair, from April 8 to 12, more
than 150,000 people visited the fair and signed intention contracts worth more
than 3 trillion yuan.
"Houses are one of the largest spending for Chinese people. They may spur
consumption in related sectors such as decoration, furniture and home electronic
appliances. Home sales may play a big part in stimulating domestic consumption,"
a researcher with the National Development and Reform Commission, Zhang Hanya,
said.
"The catering industry may best reflect Chinese consumers' willingness to
spend," John-Williams said. "In major cities like Beijing, Shanghai and
Guangzhou, I have not seen any signs of economic contraction."
Ding said there were two approaches to spur economy.
"One is short-term stimulus plan, which may rely on investing real estate
industry and infrastructure projects. The other is long-term stimulus plan, such
as urbanization, social insurance system improvement, education and
technologies."
The first round of stimulus package aimed at quickly spurring the economy,
but new stimulus packages should focus more on long-term goals. People will
spend more only when they feel social insurance has been put in place," he said.
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