on the second thought, I am not sure what is Stephen Roach's standard for "domestic demand' in China? Of course, with the huge population base, China can almost always to build more domestic demand, but with the already-existing millionaires, and ever-increasing middle-class consumers in cities, China already has a huge domestic demand for foreign goods (not by the standard of per capita, but by the amount of total imports. China would NEVER catch per capita consuming of the developed countries, simply because there is NO enough raw materials to meet such demand on Earth. It is that simple!).
Take cars for example, last year 3-4 millions of cars sold in China, close to NONE of them are Chinese cars. All of them are made by solely-owned Foreign companies or JV companies in China, and majority of the parts are imported. This is UNPRECEDENTED in history.
By conservative estimate, in China, there are 1,000 billionaires, 3 million millionaires, and 30 million middle-class people (defined by those who can afford to own a private car and a decent apartment (about the size of a regular house in the US)). And the middle-class people have been increasing, by estimate, 5 million/year.
By other estimates (Chinese Academy of Sciences), 15-18% of all Chinese are middle-class.
After the 20 years of purposed destruction of SOEs in China, now few things (except military products) produced in China still owned purely by Chinese. China now, by looking at consumer product only, is the biggest colonized land on earth! One can hardly buy some tooth paste made by a solely-owned Chinese company!
So what can make Roach consider China to have had consumer demand? After China completely "owned" by multi-national companies? I hope this day never comes. |
