Retail sales catching up
09 June 2021
Retail Sales
The chart shows the 1-year rolling cumulative monthly Retail Sales in both China and the U.S., measuring the consumer demand for finished goods.
- 30 years ago, annual retail sales in China were only 7,5% of the USA, or about $150bn vs. $2tn.
- China exponential growth has steadily outperformed the U.S. over the last two decades and has recently taken over the lead.
China Dual Circulation strategy
As we wrote, China explicitly stated in its last Five-year Plan that to drive its sustainable, high-quality growth it will target both external and internal demand, a strategy known as Dual Circulation.
- Retail Sales numbers suggest that internal consumer demand is still accelerating and unlikely to stop soon, given the ever-growing government focus on the domestic economy.
Growing high-income class
With close to 1bn people in its urban areas, China can count on its internal demand as a new vector of growth. Its growing affluent and middle-income classes. provide ammunitions for growth if external demand fades because of international tensions.
- Affluent and middle class are taking the lion share of both absolute household spending and as a share of total population.
- Could China be entering a self-sustaining growth era?
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