Consumer Goods Market to Grow Steadily in 2000

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Consumer Goods Market to Grow Steadily in 2000

Encouraged by pro-active fiscal policies and a favorable trade environment, Chinese economists and market observers predict that China's consumer goods market will grow steadily this year.

A group of senior economists forecast in their latest macro- economic analysis report that China's total retail sales of consumer goods are expected to hit 3.36 trillion yuan in 2000, an increase of 8 percent. The retail sales of consumer goods registered a nominal growth of 6.8 percent last year; if the drop in the consumer price index (CPI) is taken into consideration, the growth rate is in fact around 10 percent.

Economists pointed out that the actual sales growth rate might be a little slower than the 10-percent growth last year. The report says market sales of consumer goods picked up remarkably in the latter half of 1999 as the country's pro-active fiscal policies began to take effect. China achieved an annual GDP growth of 7.1 percent in 1999 despite a decrease in trade surplus and investment growth.

Economists noted that expanding domestic demand remains part of the government's macro-economic policies for 2000. The government will do everything in its power to "further improve the living standards of the Chinese people".

Global GDP growth is expected to increase in 2000, with the figure estimated at 3.5 percent. Global trade is expected to increase by some 2 percent to register a 6-7 percent annual growth. Market analysts said that growth in exports will strongly expand consumption in China's affluent eastern regions. Developing China's western regions will channel more domestic and overseas capital to these areas and raise the living standards of local residents, especially a large number of farmers. However, there are a number of disadvantages for the growth of consumer market. For example, the progress made in China's entry into the World Trade Organization has made some people believe that prices for some imports will decrease sooner or later. As a result, they are reluctant to spend their money. This will strongly affect sales of automobiles and a number of other consumer goods.

The economists also noted that China's on-going reforms of housing, social security and medical care may also affect residents' immediate consumption patterns.


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	Economists pointed out that the actual sales growth rate might be a little slower than the 10-percent growth last year. The report says market sales of consumer goods picked up remarkably in the latter half of 1999 as the country's pro-active fiscal policies began to take effect. China achieved an annual GDP growth of 7.1 percent in 1999 despite a decrease in trade surplus and investment growth.




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