China’s Consumer Economy

De Beers China StoreForecasts that the pace of China’s economic growth will slow in 2012 have fueled some ‎additional caution in the diamond markets. Wary of the impact that a global slowdown will ‎have on the country’s exports, naysayers contend that Chinese consumers will curb their ‎spending.‎

With the May 1 Labor Day long weekend approaching – billed as one of the more ‎important retail periods on the country’s calendar – their concerns may be justified. ‎Shanghai’s diamond wholesale market is not as busy as it was this time last year. While ‎the value of China’s diamond imports was up 24 percent in the first two months of 2012, ‎the quantity of goods brought into the country fell 17 percent from the same period last ‎year, according to a report by Xinhua News Agency citing China’s General ‎Administration of Customs. ‎

Consumers there are looking at the global landscape, and with Europe being China’s ‎largest trading partner, the lingering European crisis will no doubt impact the Chinese ‎economy. In February, China posted a rare trade deficit but managed to return to a ‎relatively deflated March surplus. ‎

Still, the dragon certainly has not lost its fire. From an economic viewpoint, the high pace ‎of growth seen in the past few years was perhaps unsustainable. And viewed in a ‎different light, China’s economy is showing signs of maturing, even if it is still in relative ‎infancy. ‎

One sure signal of its maturing economy is the country’s shift from being an investor-‎driven to a consumer-based market. The timing for this development could not have ‎been better.‎

While exports may decline in the face of global (or European) economic challenges, local ‎consumption is still on the rise and helping to sustain gross domestic product (GDP) ‎growth projections at around the 8 percent level. Retail sales grew by a healthy 15 ‎percent year on year in the first quarter of 2012, according to the National Bureau of ‎Statistics of China. ‎

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