I had planned on posting "China ETFs: The Shift to Domestic Consumption" but it got lost on the Glorious Downtrend Follow Through Day.
[I think he was short -ed]
We'll see if volatility continues rising on Monday, in the meatime Next Big Future offers:
Morgan Stanley has a series of reports under the umbrella Chinese Economy through 2020.
Their base case scenario is that China's total consumption will equal two-thirds that of the US level and account for about 12% of the world total by 2020. China’s economy will be driven more by consumption than production in 10 years due to the support of the six factors: demographics, production in 10 years due to the support of the six factors: demographics, urbanization, infrastructure, social security,education and consumer finance.While ETF Trends posts:
Lou Gang, a strategist with Morgan Stanley China said there is still room for further improvement of infrastructure, such as high-speed railway, ultrahigh voltage(UHV)) grid and pollutant drainage equipment, in addition to China’s massive investment on infrastructure in recent years. Meanwhile, with the progress and reform of the pension, health care and education systems along with the further construction of a social safety net, China's enormous deposits held by residents will be released and give an unprecedented push to consumption. China's urbanization will rise from 47 percent to 63 percent. According to the report, Morgan Stanley believes that driven by the urbanization process, China will see its fixed asset investment double and its consumption triple by 2020, making 14 percent of the world’s GDP.
In the first, we argued that China's economic growth rate potential is set to slow but should nevertheless average 8% per annum through 2020, with a profound structural evolution that leads to rising shares of consumption-GDP, service sector-GDP, and labor income-GDP (see Chinese Economy through 2020: Not Whether but How Growth Will Decelerate, September 20, 2010).
In the second installment (Chinese Economy through 2002 (Part 2): Labor Supply to Remain Abundant, October 10, 2010), we made the case that China will continue to benefit from a low demographic dependency ratio and abundant labor supply through 2020. The expected deceleration in the growth of the working-age population is unlikely to become a headwind to overall economic expansion in China.
This third report aims to assess how consumption will take off over the next decade as a driver of growth. We make the following key points...MORE
China ETFs: The Shift to Domestic Consumption
The developed Occident is seeing growth at a crawl, but China’s economy is one exception. The country’s exchange traded funds (ETFs) are shooting skyward, thanks to a shift in domestic consumption.
Joel Backaler for Forbes asked Oxford University Professor Karl Gerth about consumerism in China. Gerth says China’s market is emerging as a premier destination for multinational corporations, while Chinese companies are developing into global name brands that will soon compete with established international brands. [China ETFs: Plays for the World’s No. 2 Economy.]
China’s government is moving toward domestic consumerism by implementing policies designed to attract greater consumer demand, which will make more Chinese realize the convenience of Western styled products, adds Gerth. For instance, the Chinese rich have already started to break away from traditional styles of saving and are driving the luxury market in China today.
The Chinese property market is in the world’s biggest bubble, rising at 20% a month in some regions this year, writes Gordon G. Chang for Forbes. Residential real estate prices surged 68% in the first quarter year-over-year and up 12.2% in the second quarter year-over-year. Still, some don’t believe the bubble is going to burst anytime soon, with vacant apartments held by speculators valued at 15% of GDP. But just in case it does, have that exit strategy ready.
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