China to overtake US as world's largest consumer market 'very soon'
China's consumer goods market is rapidly catching up with the US and is poised to become the world's largest in the near future, according to a top Chinese economic planning agency official.
"China's retail sales for the first time surpassed 40 trillion yuan in 2019, an increase of more than 42 percent from 2015. It will overtake the United States to become the top consumer goods market very soon," deputy chief of the National Development and Reform Commission, Lian Weiliang, said at the China Reform Forum, as quoted by Chinese media.Also on rt.com China’s Singles’ Day sales hit record $115 BILLION as economy recovers from Covid-19
He added that the Chinese economy should take advantage of its "super-large market" to build a "high-quality market system in five years."
While the official did not offer any particular timeframe within which the two consumer markets would trade places, state-run Global Times newspaper noted in an article that it could happen this year.
The pandemic has crippled retail sales around the globe in the past 12 months, with consumers remaining cautious about their spending amid a crisis that has left millions without jobs. In October, retail sales in both the US and China missed growth expectations, but the latter posted bigger gains. Retail sales grew 4.3 percent in China, while the US saw 0.3 percent growth.
Retail sales were expected to pick up amid big holiday sales in November. This year's Black Friday has already set another record with consumer spending reaching $9 billion. Meanwhile, Cyber Monday is poised to become the biggest online shopping day in US history, with anticipated sales of up to $12.7 billion. However, both events are far behind China's Single's Day, which generated $115 billion on two giant online platforms Alibaba and JD.com.
China was just about $200 billion behind US consumer spending in 2019 before the coronavirus crisis hit, according to Wang Yiming, former deputy director of the Development Research Center of the State Council. He also noted that the predicted shift could occur as early as this year.
Wang warned, however, that domestic consumption in China is still under pressure, while high household debt and a widening income gap could create additional challenges.
With the worst of the coronavirus crisis seemingly over for China, the world's second-largest economy is set to be one of a few to avoid contraction this year. The International Monetary Fund (IMF) expects China's economy to grow 1.9 percent in 2020, while the US economy is set to shrink by 4.3 percent. The US may also see another contraction in the first quarter of 2021, some analysts have warned.
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