Chinese consumers are embracing credit. This has huge implications for increasing China's consumption to investment ratio, which needed for the transition from low-income, to middle-income to high-income country. This implies growth of the domestic economy and less dependence on the external sector.
It will also bring China trade surplus more toward balance and over time likely into deficit as "the Chinese consumer" replaces "the American consumer" as the purchaser of last resort.
And it's likely that India won't be far behind, with Indonesia in the wings. This will make Asia the global economic hub, unseating the West.
Transnational firms know this, of course, so now the push is on not only to access these markets but also to dominate them.
How's that trade war going you?
Ecns
As income grows, Chinese saving less, borrowing more
CGTN
See also
Forbes
Alibaba's 'Singles Day' Sales Record A Symbol Of An Unstoppable China
Kenneth Rapoza
1 comment:
Chinese consumers are embracing credit. Tom Hickey
Bank "credit" is premised on expensive fiat, i.e. on the Gold Standard, and has all sorts of problems associated with it such as the boom-bust cycle and the philosophical problem of government privilege for the banks and the rich, the most so-called "credit worthy".
Otoh, with inexpensive fiat, the direct lending and borrowing of fiat (i.e. "loanable funds") is feasible with no need for bank credit and its attendant ethical and stability problems.
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