Category: Financial Times

China: The “Last Untapped Market on Earth”

China consumer spending is on the rise, and it’s showing that China can be a powerhouse for companies selling a vast range of products.  At the Central Economic Work Conference in December, policymakers said that they will "increase the proportion of the middle class" in 2012 and that this will transform the country from one where products are made to one where they are purchased.

Retail sales rose 17% from January through November of 2011.  President Hu Jintao is hoping that retail sales will increase by more than 15% annually over the coming five years and that they will get to 32 trillion yuan by 2015.

In addition, by 2015, China may actually beat out Japan as the world’s center for luxury market goods, according to research that was released by McKinsey & Company.

And companies are starting to follow suit. Apple Inc. recently changed its line that says, “Designed din California, Made in China” to say “Designed in California, Made for China” for its new Shanghai store.

Tesco China, the UK-based grocery and merchandising retailer has more than 100 outlets in China.  Their corporate affairs senior vice president Lu Haiqing said, that China is the "last untapped market on Earth."

The Macro Euro-China Enterpreneurs Club

China and Europe are strengthening ties, as the Macro Euro-China Entrepreneurs Club recently signed an agreement with the government of Heilongjiang of China’s northeastern province to help 100 European firms. These firms will attend the China Harbin International Economic and Trade Fair (HTF) next year.

The fair will take place from June 18-20, 2012 and will include 100 firms from 15 European countries. Commerce official Chu Zhihui of Heilongjiang said that the member firms of the club have expressed their interest in many areas include food processing and car production.

The Macro Euro-China Entrepreneurs Club which is based in Paris is a non-profit organization that serves as a match maker between European firms and investment opportunities in Asia.

This year’s upcoming fair is jointly organized by the Ministry of Commerce, the National Development and Reform Commission and the China Council for the Promotion of International Trade and the local government. It’s been taking place in Heilongjiang for the last 22 years and had $17.82 billion worth of overseas-related contracts just last year.

China’s Yuan and Global Economy

Asia, and especially China, has become an increasingly valuable cog in organizations like the International Monetary Fund and numerous global markets. Financial institutions and traders recognize that China’s financial and political health are integral for global economy.

The yuan, China’s currency, has increased against the dollar reaching a record high. Many financial experts believe this could have serious impact on both Chinese and global economy.

Is one financial insider said, in an interview with AdvisorOne earlier this year,

“There is a $30 billion a month in foreign currency sent to China through trade… That $30 billion could add to the liquidity of the Chinese economy by appreciating it further and making imports more expensive. That action will cause importers to buy more by paying in foreign currency, and that causes Chinese foreign product exports to drop due to their greater cost.”