China’s middle-class may not be strong enough to power domestic consumption, especially after the boom in construction after a national post-2008 crisis economic stimulus. This LA Times blog post points to a new upscale but relatively empty mall in Beijing as a sign of how there just isn’t consumption from Chinese. As such, many malls and apartments which were newly constructed from stimulus funds are largely empty and lack buyers for now. Given China’s vast population and still surging economy, you’d think that getting enough buyers and shoppers would be only a matter of time. Yet as long as social resources like health services and pensions are not adequate, many Chinese definitely will not be loosening their purse strings or wallets anytime soon. One problem I have with the article is when it compares China’s personal consumption with that of the US (China’s is 40% of GDP to the US’ 70 %). Yes, China’s personal consumption (personal spending by people as opposed to corporate or industrial entities) should increase for the economy to become stronger but US personal consumption levels should never be held up as a target.
Unfortunately I have to follow up with more bad news, albeit of a sporting kind. China’s men’s football team beat Singapore in their first group match but then they went to Jordan and lost 2-1 (yes, to Jordan, which to be fair has been improving recently). China’s women’s football team has performed disappointingly in their Olympic qualifying tournament so they are in serious danger of not being at London in 2012. I had the opportunity to watch the China-Singapore game live on TV while I was in China and it was a bit harrowing in the early going. The team gave up a goal in the first half on an errant pass in midfield that was intercepted, but thankfully they came back to score 2, though one on a not-so-obvious penalty. All I know is Li Weifeng, Zheng Zhi (whose introduction did spark the comeback against Singapore), Qu Bo and company need to buckle up, especially since they’ve got a new Spanish coach Jose Antonio Camacho. Their next game is at home against Iraq on Oct. 11. China lies second in their group, just ahead of 3rd-place Iraq due to goals scored, with the top two moving on into the final group stage.