Retail sales in China just keep on rising

It’s been announced last week that 2014 retail sales in China increased by 12% to 27 trillion yuan. This is against the background of lower GDP growth figures announced too at 7.4% which continues the ‘slide South’ for China GDP, though still way above the figures of any other country.

This is seen as evidence that Chinese consumers are increasingly buying more personalised and diverse products. The continued growth is also predicted to create more opportunities for international businesses and Chinese entrepreneurs.
 
Clearly this will benefit the entire economy including Chinese manufacturing, wholesaling and the service sector.
 
The growth in online consumption is likely to be the primary driver. The forecast is +50% much to the delight of online retailers and logistics firms. Certainly the staff in the shopping malls around me have time to play games on their new iPhones so customers seem a little rarer these days in the physical stores. Also to extra deals, vouchers and haggling on price reductions make these malls more like street traders than the upmarket image they would like to portray. Commissions are thin and you are pounced on, even in favour of reaching level 10 on the iPhone!
 
The implication of this is likely to be a change in the dynamics of the Chinese economic system. The engines of growth for the US and Europe have always been privately owned, dynamic businesses. I have spent most of my career working in this part of the market in a variety of countries.
 
What typifies these businesses is that whilst they are often not the largest they are normally the most ambitious. Owners and employees are driven to achieve growth and have, or feel like they have, a personal stake in the business.
 
As I talk to Chinese business leaders and workers I increasingly feel this personal connection to business. It’s the essence of what built the American dream and what will contribute to future Chinese business and economic success.