The Rise of the Chinese Consumer
Chapter One
Top-Down Projections of
Consumption Growth in China
In this chapter, we provide a top-down view on Chinese household consumption
spending growth, projecting ahead in both absolute terms and relative to key country
peers for the period from 2004 to 2014.
We make the following conclusions. For 2004, we estimate the US$ value of
aggregate household consumption spending in China as US$704bn. This represents
around only 9% of US consumption spending and 3% of our estimate of global
consumption spending. Thus currently, in US dollar terms, Chinese consumers are
only a marginal force in global consumption spending.
However, major undervaluation of the Renminbi versus its purchasing power parity
(PPP) exchange rate means this figure significantly underestimates the underlying
quantity of consumption activity within China in our view. For example, in 2003
China consumed 33% of global rice production, 22% of soy bean oil production and
12% of global meat production (Figure 1.1).
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