中国正成为全球最大消费国

Andrew Stevens: 33% roughly is consumer spending in China compared that with US which is about 70%. When realistically can you see China getting to its own target of about 50% consumer spending?

Fan Cheuk Wan: Yeah, indeed, we believed the robust consumption growth in China is going to drive this rebalancing process, urh, we expect China, is likely to overtake the US to become the world's largest consumption market by 2020. And we also expect the contribution from private consumption to reach the target set by China to be 50% of GDP in the next decade.

Andrew Stevens: So next ten years, sorry..

Fan Cheuk Wan: Yeah, in the next ten years and this will be mainly driven by the distribution income reform that has been mapped out in the Twelfth Five-Year Plan, and this is going to be the most important structure reform for China.

Andrew Stevens: Ok, so talking about this new Twelfth Five-Year Plan, how a redistribution of income , very difficult though isn't it to wean themselves off this export model because it has been so successful. And there is a lot of powerful voices in Beijing, saying, if it ain't broken, don’t fix it.

Fan Cheuk Wan: In fact, China is very determined to drive this rebalancing in its growth model especially after the global financial crisis, as China is now facing the multi-year deleveraging of the US, and European consumers, especially in the US. So China cannot rely on the indebted consumer in the developed economies anymore as its key growth engine to drive growth in the next decade. So the income reform in China, this will go together with more substantial growth in labor wage, this is going to be powerful catalyst to support private consumption expansion in China.

Andrew Stevens: Yeah, a lot of people say that people won't start spending until they feel there is a proper social safety net. They have their healthcare costs at least partly met by government that if they lose their job, the government is going to help them somehow. We don't have that social net there in environment. Isn’t that stopping people spending and won’t that take a long time to put into place?

Fan Cheuk Wan: The social security net is definitely a critical social infrastructure that the government need to put in place, to give people the financial security to spend, but on the other hand, we also identify the significant accumulation in household wealth as an important driver of private consumption, as we observe from the key findings of our critics with global wealth report. We recently launched our wealth report which shows that China is currently the third largest global owner of household wealth. And this significant accumulation of personal wealth is providing the financial security for consumer to develop the increasing propensity to spend and with the strengthening local currency, this will also strengthen the purchasing power of Chinese consumer as it is. It will become less expensive for Chinese consumer to import consumer product.