The Chinese market is littered with products labeled “Made in China”. This is a clear indication of an economy that is keen on producing its own goods and ensuring that the goods have adequate market locally. However, that has only been possible due to the Chinese consumers who have lately become more aggressive than ever projected. According to economic analysts, the economy is basically driven by local consumers who do not just buy goods for their consumption, but also as a sign of patriotism. It is the reason why their economy was not significantly affected by the recent economic recession. As the rest of the world was mulling over falling exports, China was reaping from a well-established local consumer market. This has made many financial analysts to project that China could soon overtake the United States as the largest market in the world. This paper investigates how the new trend of consumption affects the Chinese economy and projects the economic future of China as well as that of the world.
The Future of American Airlines
Advertisements have become commonplace in China due to the consumers’ aggressiveness. Although the country is formerly known for its catchy political slogans that moved Chinese people and the world alike, they seem to have been changed into adverts. It seems that every emerging company would like to share in the local market in order to record good sales without incurring the cost of shipping them abroad. Initially, one would have thought that advertisements would not be significant in China because most people did not have access to televisions. However, this has suddenly changed because every household appears to own one at the moment. Before the aggressive advertisement spree was launched, the big firms as well as the government subsidized the cost of electronics so that as many people as possible would have access to television. According to the Chinese Department of Communications, even poor families have access to a TV. This keeps the entire nation aware of all goods and services available locally and internationally so that they can choose from the expanded market. Besides this, local brands seem to be emerging faster than the number of companies producing them. It is amazing that only a few years ago, even the most popular international brands like Coke were hard to come by in China, however, right now China can boast of its own brands. Multinational corporations are said to be rolling out a program that will see them approach the market through brands that resonate properly with the populace, especially the urbanite youth. Essentially, consumer culture appears to be shaping the Chinese market in terms of media strategies and product branding. This is the magnitude of influence that Chinese consumers have had on the Chinese market (Jonh, 2010).
Although the Chinese economy was previously defined by two social classes, the 10% rich who controlled 90% of the economy and 90% poor who account for a meager 10% of the economy, the new consumer aggression has caused a significant expansion of the middle class in China. Indeed, the news that annual spending of the average Chinese increased by over 10% every year can only be interpreted to mean larger pockets for the average Chinese. This has purely been attributed to the government policies that have suddenly shifted to the increased spending on development projects as a way of pumping money to the consumers. For instance, many people are hired to work in road construction projects and handsomely paid for it. Thus, even poor families have been able to generate some income from these projects. In addition, the government has embarked on widespread provision of social services like health insurance and unemployment benefits as a way of encouraging people to save. Consequently, the average Chinese have risen from the desperate situation where households lived on a dollar a day to a middle class level where they can afford most of their basic needs. According to the Chinese Vice President, the government has significantly contributed to the expanded middle income class by building new schools and providing pilot jobs for retirees to reduce the amount of money that families spend on their young and old. Economically, this has brought the obvious benefit of increased local market and reinstated the position of local consumers who are the principle users of Chinese goods. Indeed, it means that Chinese economy will continue to pose an enormous threat to the US market as its aggressive consumer policy is built on strong foundations that are not likely to be broken in the near future (Jonh, 2010).
The new trend of consumerism in China has revolutionized the car manufacture industry both in China and in the world. Around two decades ago, it would have been easy to name the Chinese families who owned cars. In fact, it would be unimaginable to compare Chinese car market with that of the United States. However, that has since changed with the new projections that it could actually surpass the United States. In 2010, Chinese automobile industry appeared to be overtaking that of the US when they recorded a 40% rise from the previous year. This can only be attributed to the robust consumers as well as the resolve by Chinese companies to give their local consumers quality for their money. The cars manufactured locally are of such a quality that Chinese people have no reason to import cars from abroad. Currently, the international multi-companies like General Motors seem to be trooping to China in order to take advantage of the expanded market. Although will certainly sleaze the sales made by local companies, the entry of such big companies will also expand the market further by offering more stable jobs to the Chinese citizens. Either way, Chinese consumer aggression will bring lots of benefits to the economy and indeed thrush the country into global economic competition. Besides cars, the new focus on electronic products has helped to reduce the local prices as well as diversify the Chinese market. It can only be projected that China would soon emerge the new hub of affordable electronics (Keith, 2012).
The Chinese government has literally had to struggle to control inflation in the country. It stems from the fact that there is more money in people’s hands, thereby giving them a higher purchasing power. According to the literature, it has a significant influence on the market prices, especially in a free market like China. For example, once ten people get money the desire to acquire goods becomes obvious. It implies an increased demand for the goods and services in the market. When sellers realize that their commodities are increasingly attracting demands in the market, they would certainly raise their prices, thereby offsetting a trend of inflation in the market. In order to avert this, the Chinese government has embarked on a program that ensures that manufacturers do not unrealistically raise prices of their commodities. In fact, financial records that inflation reduced significantly last month due to the measures that the government seems to be putting in place. It is what gives government officials the courage to implement their untried financial policies of stimulating the economy at some time and suppressing it at other times. According to Chinese National Bureau of Statics, these policies appeared to have eased the trend of inflation that had taken toll of the Chinese economy (Jonh, 2010).
The other negative effects that have been brought about by the Chinese consumerism are energy dependence and environmental destruction. As many people acquire private cars, they increase the country’s demands for petroleum fuel. Economic records show that the country has experienced a major surge in its oil imports. In fact, they seem vulnerable to the international community to the extent that they have been forced to adopt a soft diplomacy even to countries’ like Sudan. It is because taking a tough stance on these governments would cut off their oil supplies which as a result would be detrimental to the Chinese people. Even the newly emerging companies have been forced to look for alternative sources of energy, including bio-fuels in order to ensure their security. The increased use of oil fuels has led to the environmental destruction, an issue that has almost stalled the implementation of the Kyoto Protocol. While the protocol assumes that United States and other developed countries should take the greatest responsibility for global warming. It has emerged that China, although is a developing country emits much more carbon dioxide than the United States. According to the literature, China has become a country of traffic snarl-ups and the global epicenter of carbon emissions as both vehicles and industries have increasingly become dependent on oil fuel. Just recently, the international media has reported about a 100 kilometer traffic snarl-up in China to the amazement of everyone. However, it was not news in China because people have become used to such scenes. Worse still, attempts to ease traffic congestion by constructing more roads have caused more harm to the environment because forests are cleared to pave the way for road construction. Essentially, even as the world talks of an expanding economy in China the Chinese people are getting more worried about what this growth portends to their future (Keith, 2012).
The migration from rural to urban areas has been one of the effects of the expanding middle class in China. The emergence of industries in major cities and major economic zones has triggered migration of folks from the countryside in search of opportunities. Whether they get these opportunities is a different question. However, their migration has dealt with a great blow to the agricultural sector as less people are concentrating on their farms. It certainly negates the benefits made on the economic front when a country cannot sufficiently feed itself. Economic disparity has emerged due to the new trend of consumerism in China. For instance, regions like Shanghai and Beijing that adopted the idea much earlier have surged the way beyond the rest. As such, immigration has not only become an issue of rural to urban, but also from urban to urban. It brings the question of safety of most cities and towns in China, especially with regards to underemployment. The wave of migration has increased crime rates in most cities in China. As a result, potential investors are shying away from setting up their businesses in such cities. Nonetheless, the government has since moved swiftly to allay these fears and ensure that the country maintains the path of economic growth (Jonh, 2010).
In conclusion, China has slowly emerged as a force to reckon with in the international market due to its aggressive consumers. They have ensured that their local companies survive even at a time when the international community has gone broke. However, Chinese consumerism has caused certain economic risks that have to be checked constantly. For instance, the government has had to keep an eye on inflation rates because of its volatility. In addition, the country has become less safe with people migrating from the rural areas to urban areas in search of jobs.