Report from APLF

Western media attention continues to be focused on the financial crisis, falling stock markets and a predicted economic slowdown hitting the US and European economies. However, retail sales continue to boom in China. Here there is no lack of consumer confidence. In the October 2008 issue of "China Economic Review" there is a detailed article on the unstoppable growth of the retail sector in China. The data quoted comparing the spectacular growth in 2007 with even more outstanding data from 2008 confirms that both wealth and disposable income are still on the rise in China.

Key data is as follows:
China's retail sales volume, which rose 12.9% year-on-year in 2007 as a whole, accelerated to 14.3% between January and August of this year.

In value terms, retail sales grew 16.7% in 2007 but were up 21.7% year-on-year between January and August 2008.

Retail sales value growth rebounded to hit a 12-year high of 23.3% in July, and continued to post strong growth - 23.2% - in August.

These are the latest figures available from China and are in stark contrast to the 0.3% fall in August retail sales in the US.

These figures indicate that opportunities exist for western exporters to find new consumers in the world's most populous country.

Western companies can target the Chinese market and at least partly offset declining consumer demand in traditional consumer markets as the Christmas sales period approaches in the short term and then develop long term export strategies to this growing consumer oriented society.

Nonetheless, caution is advised.  One concern is that as both domestic manufacturers in China, and international companies, compete for the same market share margins might suffer.  Also, logistics is China have not really advanced at quite the same rapid pace as other sectors in the economy.

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