China's Consumer Economy Growing, and Becoming More Homegrown

[Frodo]

Following in Taiwan's footsteps -I will make a prediction that by the 2020s (with the transition to a consumer-dominated economy complete), under increasing pressure by a growing middle class, the leadership of the Chinese Communist Party will begin the decades-long process of gradual political liberalization:

China’s Consumer Economy on Track to Add Nearly $2 Trillion by 2021:
China Is by Far the Biggest Growth Market for Consumer Companies, According to The Boston Consulting Group. But to Capitalize, Companies Need to Understand the Changing Behaviors and Preferences of Chinese Shoppers

DALIAN, China, June 27, 2017 (GLOBE NEWSWIRE) --

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Foreign brands capturing less of China's consumer market

BEIJING (BLOOMBERG) -

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[136or142]

Following in Taiwan's footsteps -I will make a prediction that by the 2020s (with the transition to a consumer-dominated economy complete), under increasing pressure by a growing middle class, the leadership of the Chinese Communist Party will begin the decades-long process of gradual political liberalization:

China’s Consumer Economy on Track to Add Nearly $2 Trillion by 2021:
China Is by Far the Biggest Growth Market for Consumer Companies, According to The Boston Consulting Group. But to Capitalize, Companies Need to Understand the Changing Behaviors and Preferences of Chinese Shoppers

DALIAN, China, June 27, 2017 (GLOBE NEWSWIRE) --

You must be logged in to read this quote.

--------------------------------------------------------

Foreign brands capturing less of China's consumer market

BEIJING (BLOOMBERG) -

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I'd predict the opposite:  that the Chinese dictators will crash their economy if necessary in order to not have to liberalize politics.

[jaichind]

PRC from a GDP/capita point of view is merely ROC with a 30 year lag (and ROK with a 25 year lag.)  Of course one cannot assume the political system will evolve the same way.  ROC had competitive regional elections at the county level since the 1950s and had limited Legislative elections in the 1970s and 1980s.  As a result not all top political talent were within the KMT.  There were plenty of capable political and administrative talent in anti-KMT circles starting in the 1960s and the size only grew from there.  Currently on the PRC all the political and administrative talent are in the CCP (although not necessary of the CCP.)  I suspect a political developments on the PRC will now evolve into some combination of political competitive at the town and village level and a movement toward meritocratic based political combat within all levels of the CCP.  So the PRC of the next 15 year will not be a ROC clone of 1987-2002.  And that is for the better. From a policy point of view ROC has floundered due to competitive populism since the mid 1990s and it has never really recovered. 

[Beet]

China's per capita GDP has apparently overtaken Brazil's.

[jaichind]

China's per capita GDP has apparently overtaken Brazil's.

Yeah, that depends on weather it is in PPP terms of nominal terms which in turn is a function of FX shifts.  Even PPP there are several versions (Penn World, IMF, World Bank) also also weather it is expenditure approach or product approach or income approach.  But overall most of the numbers I am seeing has PRC exceeding Brazil.  The economy PRC is most like today is Thailand. PRC is a bit below Thailand in terms of PPP GDP/capita although in nominal terms PRC is ahead of Thailand.  I personally go with GDP/capita PPP.   

[Unapologetic Chinaperson]

I'd predict the opposite:  that the Chinese dictators will crash their economy if necessary in order to not have to liberalize politics.

China is not North Korea. I don't think your scenario will happen, just like I don't think a Chinese collapse is plausible either.

First of all, China is not a dictatorship, but an oligarchy. President Xi has immense power, but he was selected by others in the CCP, and must balance other power players in the government.

Second, the CCP needs economic growth in order to sustain its legitimacy. No way it will purposely crash China's economy (how would they even do that?), because then the Chinese people will start to hate the party, and that's bad. That's why analysts have been freaking out about China's slowing growth, even though the economy is still growing at above 5% a year. Slow growth --> political instability.

That said, Frodo's scenario, while more plausible, is still up in the air. The government might liberalize, but on the other hand it might become more authoritarian and increase nationalistic fevor as another measure to shore up legitimacy.

Regardless, it's news like this, along with China's progress in many technology fields, that makes me optimistic about China's growth prospects. Other developing countries (e.g. Brazil) do not have such beneficial growth conditions as China's.