What will Chinese consumers do?
Young middle-class couples like Gong and Wang are key to China's economic future — just as China's future may determine how long the global recession lasts. They are part of the population cohort the government hopes will boost domestic consumption, which takes up a mere 35% of the country's GDP right now, and thereby wean the country off export-dependent growth. China has long been concerned about its sluggish domestic consumer demand and recently vowed to expand it by injecting $586 billion into nationwide infrastructure.
But a dwindling confidence in the economy seems to be getting in the way of the government's agenda. Here in the industrial town of Dagang, just south of Tianjin, instead of spending more to spur the country's GDP, the Gongs are actually tightening up their wallets for a rainy day. The Chinese have been hardy savers even in the best of times, scoring the highest saving rate among all major countries. Now, more than ever, their money is sitting in banks, unspent.
Read the complete Time Magazine story on China's consumers and their attitudes towards consumption here.
But a dwindling confidence in the economy seems to be getting in the way of the government's agenda. Here in the industrial town of Dagang, just south of Tianjin, instead of spending more to spur the country's GDP, the Gongs are actually tightening up their wallets for a rainy day. The Chinese have been hardy savers even in the best of times, scoring the highest saving rate among all major countries. Now, more than ever, their money is sitting in banks, unspent.
Read the complete Time Magazine story on China's consumers and their attitudes towards consumption here.
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