Skip to main content

China's Domestic Consumption - Glass Half Full or Half Empty

The following table by McKinsey was highly illuminating. It puts into sparkling perspective how important private domestic consumption is to each country as a percentage of GDP. One should always strive to be more led by domestic consumption as that usually means a better grasp and control of an economy's fortunes. China has been desperately trying to lead the world back from the diminished global trade due to the recent global financial crisis by shifting from an investment led economy to a more domestic driven type. As the table shows, its a long uphill climb still. Thats the negative way of looking at things - the half full view would be that there is still a lot China can do (and will do) to ramp up its domestic economy, and it will only means more consumption of global goods and services in the long run. Its going to be the Asian century mainly by moving just 10%-20% of the rural folks in China and India into the middle class consumption category.

On a side note, Malaysia's domestic consumption as a percentage of GDP is high enough but the major caveat about looking at tables such as these is that if your population is smallish, the high private domestic consumption percentage figure is too one dimensional. If your population is say less that 50m, you probably HAVE to be led by investment as a priority as your population will not be able to generate sufficient critical mass of demand for your industries to compete on a global scale with the economies of scale that is needed.


p/s photos: Jessica Gomes


Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.

My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.

I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.

My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.

Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:

p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far

I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…