Advantages of China’s Slowdown

Advantages of China’s Slowdown

28 January, 2016 - Uncategorised

china-slow-down-red-flag-sign

Investor confidence in China has currently been tested with the economic slowdown. The latest GDP figures for the world’s second largest economy show a growth rate in the third quarter of 6.9% down from 7%. With China domestic consumption down, many big names brands LV and Prada are reeling in their China operations and the British press are describing it as “unprecedented” and blaming our own recent Blue Monday crash on China.

However, other brands such as Hermes, Chanel and many medium sized brands are staying the course. If we put everything into perspective, we can see why now the best possible time for getting into the Chinese market is.

  • China’s economic growth have to slow down, after decade of super growth infrastructure is now more established and growth rates are expected to slow as there is less room to grow. The issue is that giant is so big, small decreases in growth a much larger global impact.
  • 9% GDP growth still equates to about US$900 billion in real terms and still accounts for 25% of the world’s total growth and isn’t something that should be baulked at.
  • With the UK economy operating only at 0.5% GDP growth (equivalent of only 0.1% growth in China)
  • Chinese tourism figures are still on the rise and still spending money. Europe is expected to grow at a 20% rate. Despite the strong showing of Chinese consumers visiting the UK, accounting for 20% of all West End sales, the UK has been underperforming as a result of an antiquated VISA system. With recent VISA reforms, passenger load increases and direct flights to Manchester commencing, UK Chinese tourist figures are set to sky rocket this year
  • Recent market access has opened up with China’s leading social media WeChat now accessible to foreign business. This new market advantage now allows for medium sized brands, low cost and low set-up access to Chinese consumer directly in China.

For more information regarding China’s economy and how to take advantage of the latest market situations please contact Steven Bywater on s.bywater@wei-ukconsulting.com or +44 (0)20 7434 7353