China’s Consumption Boom in Perspective

Find above for your reading pleasure a little perspective on China’s consumption boom. If both Chinese GDP and Chinese consumption keep growing at their current rate, when does China’s consumption as a share of GDP equal America’s? The answer is not for a long time.

On the other hand, I don’t think anyone does expect China’s GDP (which is extremely heavily tilted toward various construction projects) to keep growing at this pace for nearly that long. The interesting question is whether, given China’s current extremely low consumption share, practical living standards of Chinese households can keep rising at a fast pace even if the overall headline growth numbers slow.