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China could spur extra 15 tln USD in consumption in next 10 years: report

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NEW YORK, July 22 (Xinhua) -- China could generate an incremental 15 trillion

U.S. dollars in consumer spending over the next decade through a combination of

business strategies, according to a report released by the Demand Institute


Those strategies should include increased communication and better access to the

Chinese public about products and services, and innovations that expand the range

of financial services that typically enable higher levels of domestic consumption.

The report, titled Sold in China: Transforming to a consumer-led economy, said

China's economic success story has been largely driven by investment-led and

export-led growth, including massive infrastructure investments.

As a result, while Chinese consumer spending has grown in absolute terms,

consumption as a share of Gross Domestic Product (GDP) has steadily declined for

six decades.

The Demand Institute projects that share is unlikely to rise significantly over the

next decade unless there are substantial interventions from government and business


"Shifting the forces generating GDP growth is required to maintain the growth and

prosperity of China. The time has come to provide a path towards a more consumer-

led economy, where 'Sold in China' at least equals 'Made in China' as the

foundation for future economic development," said Louise Keely, president of The

Demand Institute.

The report concludes that for the transition to be maximally successful and

enduring, not only must the government provide the requisite policies and

incentives, but the business community must make parallel investments to facilitate


Consumer credit services and life, health and property insurance are just a few

product and service categories poised for growth should the right innovations,

communications, access and payments infrastructure be employed.

The Demand Institute evaluated several future scenarios, of which the most

optimistic would lead to a total of 420 trillion yuan (about 68 trillion dollars)

in consumer spending over the next decade, a full 90 trillion yuan (about 15

trillion dollar) more than if consumption's share of GDP was to remain flat.

The Demand Institute has launched a research program on the future of Chinese

consumer demand, of which this is the inaugural report.

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