According to many, the Chinese consumer sector is really the hot spot to watch at the moment. As DBS Group Research explains, the consumer sector allows for "beauty of both sides." This means, as they explain it, that these consumer companies offer "better resilience during the harsh times as well as fruitful returns whenever skies clear again."
The Chinese government is encouraging this emphasis as well, creating policies that help with consumption. They have focused on increasing minimum wage, limiting the medical costs that individuals can accrue, building more affordable housing and increasing transportation systems.
As the yuan continues to appreciate, this also increases the potential purchasing power that mainlanders have. There will be more interest in gold, luxury items and high-end merchandise, according to the DBS Group. In addition, the government implemented energy saving subsidies in 2011 that will help the home appliance industry.
Companies to watch, according to the DBS Group include: China Foods, China Resources, and Golden Eagle Retail Group.