I sit on the edge of China in Hong Kong and I see the carpet baggers lining the streets telling fortune seekers from the West of cities paved of gold. Or in modern times where people have so much money the carry it around in duffel bags and the government needs to warn them of displaying too much wealth as it may be hazardous to their health. So is any of it true? Well like all good stories there is some truth and some fiction. Let’s hope for the sake of the global economy that there is more than a little fiction. A recent report by http://www.JingDaily.com suggests that per capita income for the majority of Chinese citizens will double to between USD16 – 34k per year. That may not WoW many jaded Westerners as far as salaries go, but it makes a very big statement none the less. For global purchasing power, the individual consumer in China can now afford most anything.
Only a few years back the wage was significantly below what is considered the U.S. poverty level. Because of the cost of living in China these people were not necessarily in poverty per se. However, being below the “poverty line” definitely meant access to many non-essential purchases were beyond reach. Now that is changing. India about 10 – 15 years saw a rapid increase in wages due to tech companies and BPO. But in India only a small segment of the population benefited. But in China it is estimated that a huge portion of the population will see this benefit. This huge portion of 1.2 billion people doubling their standard of living and now legitimately having access to goods and services will dramatically change the global economy. First off, those beloved trips to Walmart by Americans pushing their SUV sized shopping carts are probably going to become fewer. Simple business rules dictate that costs need to be passed on and with salaries getting bigger in China, the rest of world’s shopping carts will get smaller.