Houses/Automobiles Replace Household Appliances as New Leading Commodities

Home>>Business

Last updated at: (Beijing Time) Tuesday, December 25, 2001

Houses/Automobiles Replace Household Appliances as New Leading Commodities

Houses and autos enter the Chinese urban families much quicker this year and gradually replace household appliances as a new generation of leading consumer goods in China. Experts point out that for successive income growth and increased purchasing ability the Chinese urban residents' consumption level has been raised from 1,000-yuan to a 10,000-yuan grade.

Autos have quickly entered ordinary Chinese families in recent years. More and more customers' dreams have come true to possess family cars of their own. Statistics show that in the first 11 months this year China's auto output reached 2.14 million, up 13 percent over the same period last year; sales volume hit 2.15 million, up 16 percent, posting China in 2001 with the biggest growth margin and quickest growth speed over the past.

Two obvious changes have taken place in production and sales of automobiles: one is that limousines and mini cars take up a 57.4 percent share of the auto industry. Limousines contributed most to the newly-added output from January to November: limousines reported a net output growth of nearly 100,000, accounting for 37 percent of total added volume; sales volume witnessed a net growth of 120,000, accounting for 42 percent of the gross growth. The other change is that most of the buyers of limousines and mini cars are private consumers.

Of the new autos in Beijing, 70-80 percent has been by individual buyers. At Beijing Asian Games Village Autos Fair, Red Flag limousines purchased by individuals, a name brand long considered for officials, for the first time exceeded 50 percent. "Individuals" have come to gradually take the place of "government institutions" as chief buyers of autos in China.

Investment and sales of real estates have also been presenting an uncommon hot situation in recent years. From January to November, investment in real estates development hit 485.7 billion yuan, up 29.7 percent over the same period last year. Sales volume of commercial housing surged by a big margin at about 30 percent. Housing credit has become a principal part of consumption credit.

All these have been from a reform of the system of housing. House consumption has been on the rise as a result of accelerated construction of affordable housing. Investment in housing construction has increased rapidly. It is foreseeable that with a downturn of housing price and opening of the secondary housing market, more residents' dreams to have a comfortable house of their own will certainly come true.

Economic experts point out that it is an inevitable outcome of economic development for 10,000-yuan grade commodities to star the Chinese customers' consumption. Back in the 1970s, 100-yuan grade commodities as of bicycles, sewing machines and watches started to enter the Chinese families as "three major properties"; between 1980s and 1990s, 1,000-yuan grades like TVs, washing machines and iceboxes became "three new major properties" embellishing Chinese families. Nowadays, about 90 percent of Chinese urban families own color TVs, iceboxes and washing machines. Undoubtedly, such 10,000-yuan and above grades as limousines and houses will become another new generation of "leading commodities" highlighting China's consumption.

Automobiles, the First Choice for Credit Consumption

Result of a survey on 2100 residents in seven cities across China indicated an increasing popularity and a broad perspective for the automobile market to develop its credit consumption.

Of the six ways offered by financial organizations in the questionnaire for credit consumption, the respondent chose 3.1 on an average, much higher as against the 2.8 concluded in the first survey made in the third quarter of last year. Only 8.2 percent of them showed no idea of the credit consumption, 0.7 percent down from the 8.9 percent last time. Generally speaking, persons highly educated and of high-income have a higher awareness of the credit consumption than those of low income and lowly educated. Persons of the 36-50 age group have more things to do with the credit consumption than those of other age groups.

As compared with the result of last time, automobiles, instead of education, become the first choice for credit consumption by the residents in these cities.

By PD Online staff member Du Minghua

China's Real Estate Industry in a Boom

China's Real Estate to Boost after WTO Entry

China's Auto Giant Sets High Target