Bill Saporito’s October 31 Time article said it best: “Consider the cosmic irony: wobbly Western economies are depending on the Chinese Communist Party to save their capitalist bacon. Likewise, the Chinese government’s grand scheme to rebalance its economy hinges on Western-style materialism.”
“Shop ’til you drop” probably isn’t what Mao Zedong had in mind during the years he was in power, as Saporito points out in his piece on the Chinese middle class, a spending class that precariously faces what could wind up saving the global economy–or busting it even further.
What China is planning is a shift away from export-based industry to a consumer-spending based system, but it will not be easy and there are plenty of potential hiccups involved in fundamentally shifting an economy of 1.7 billion people. But the middle class of that country, which they are projecting to be 70 percent of the population by 2020, could be the saviors of the global economic structure; they have immense capacity for spending, a huge group like that.
The American century, the twentieth, is over. It’s been over for awhile, and there’s no stopping the growth of India and China now. It will be interesting to see what does happen in the Chinese economy, in the next fifty to one hundred years. Right now, we cannot predict which way it will go, but the result will be felt greatly worldwide, whichever way it swings. Spending too much time focused so exclusively on the United States means Americans, I think, are not thinking quite so realistically about the end of our own era. Not that we’re going away, it’s just not going to be our job to be Mister #1 anymore; that’s not a bad thing. China, if it takes over that spot, certainly has plenty of its own issues–inherent in its government system–that its leaders will need to sort out, not least of which includes their rough human rights record.
Companies have known for years that the developing world was an important place for them to seek new markets for their goods. Couple that with a recession across the West and other developed nations, and you see a kind of exodus now, towards those booming, growing, expansive markets–the new consumers who have their eyes on fancy goods. Gap, the American jeans company, is closing twenty percent of its U.S. stores and tripling the number it has in China.
Saporito’s most memorable bit:
If successful, the shift to consumer spending will take a good chunk of the weight of the global economy off the shoulders of American consumers and make China a gotta-be-there market for everything from video games to surgical tools to potato chips. “This generation, these strivers, they will be the saviors of the global economy,” says Tim Minges, chairman of the greater China region for PepsiCo, which is pouring billions into China in anticipation of that growth. “I really do think the Chinese middle class will be like the U.S. baby boomers.”
I, for one, am putting my faith in this Chinese middle class, as the new version of the U.S.’s baby boomers, to save us all.