EDITOR’S NOTE: Contributing columnist, Steve Nicklas, expresses his views and insight on various topics in Marketplace column.
Like an opportunistic diner opening a fortune cookie, the Chinese economy is fortuitously emerging from within its borders.
And gobbling up riches from the crust of the global financial markets.
In recent years, the Chinese economy has become more publicly inclined, with homegrown companies like Alibaba and Baidu yielding recognition and acclaim, in the U.S. and elsewhere. These types of companies are the fresh face of the modern, capitalistic China.
China’s might and reach are staggering — substantially more vast than Japan’s global foray in the late 1980s. To start with, there are 1.2 billion Chinese residents, forming a prosperous financial foundation.
Many regions of China are becoming industrialized, spawning a budding middle class with money to spend. An offspring is a steadily growing Chinese economy with a global reach, particularly through its enormous manufacturing capabilities.
Visit Walmart or any retailer, especially those selling clothing or any other mainstream goods. China. That is the name most commonly on the label (with apologies to India or Taiwan or Indonesia).
A Bloomberg article described the Chinese as “the largest, fastest growing and most world-altering demographic since the post-War American consumers.”
Just as the so-called Baby Boom generation fueled a frolicking middle class in the U.S., with commensurate needs for goods and services, the China economy is experiencing the same effect. However, the Chinese explosion has occurred in several phases, revolving around the transition from Communism to capitalism.
A once-closed financial market within China was liberated in the 1990s. The economy was jumpstarted by businessmen and entrepreneurs, no longer hamstrung by the Communist State.
Next was the roaring 2000s, whereby China’s economy flourished from within as well as from outside — as foreign companies entered and opened offices and plants. Since 2010, the Chinese economy has blossomed even further.
The country now boasts 350 million middle-class citizens (the same size of the entire U.S. population). The wealth has spread like the Great Wall. China has 2 million millionaires and ranks second only to the U.S. in terms of billionaires.
More importantly, China’s economy is now the second largest in the world. And it is projected to surpass the longtime global leader, the U.S., within the next 10 years in terms of size. Might. Reach.
Chinese are investing in foreign real estate (a lot like Japan used to), educating their children at foreign universities, and traveling at speed-of-light numbers.
Some 100 million Chinese traveled outside their country this year. And spent an astounding $7,500 per person, per trip, the highest in the world.
China has 1 billion mobile handsets in use. No wonder why Apple has pushed so hard to penetrate the Chinese marketplace.
While Alibaba is one of the biggest IPOs (initial public offering) in history, it is not the e-commerce company’s brand that is going pubic. It is the Chinese consumer, and the Chinese economy.
China is quickly becoming a game-changer in the global marketplace. U.S. automaker General Motors has been selling more cars in China than in any other market in the world.
While GM has set up regional operations in China (to feed the demand), other U.S. companies are outsourcing their manufacturing there. The message is clear and readable: China represents financial fortune (and that’s the way the cookie crumbles).