China will become the biggest retail market overtaking USA in next three years, according to a new World Bank report. Turnover in retail trade in the Asian country will rise by 7.9% in 2018 compared to growth of 2.6% in North America and the world average 3.4%, states the joint study of the World Bank, consulting firm PwC and Economist Intelligence Unit (EIU). Look at trends in China reveals that the pace of growth declined over the years, but the figures are much higher than other countries.
“Despite its slow growth China remains invulnerable to global trade links. Although the annual growth rate of turnover in retail trade dropped by 15.6%, as it was in 2009, is expected in the next two years for China to achieve average growth of 8.7%”, the report said.
As home to 19% of the world population, the rise of Chinese consumers has become extremely important in the last decade, thanks to higher wages, growing urbanization and improving standards of living. By 2022, 75% of the population in mainland China will be middle class to share from 4% in 2012, according to the consulting firm McKinsey. Businesses took note. In 2014, foreign direct investment in China soared to 128 billion USD, which overtook the US for the first time in a decade, it became clear in January at the Conference on Trade and Development United Nations. International markets fear the expected slowdown in Chinese economic growth after the 2014 Asian country GDP expanded only by 7.4%. The pace was the slowest since 1990. However, PwC and EIU believe that such fears are exaggerated.
Traders, however, may also rely on other countries, not just China. Estimates are that the revolutions in Asia will soar 10.3 trillion USD in 2018, which is twice higher than the estimate for North America. After China, the growth of trade turnover will be the highest in India – 6.6% in 2018, followed by Vietnam and the Philippines. The chances of India to catch up with China are small, the study states. The lack of reforms and the government’s refusal to open the market to retail goods to foreign investors means that global traders cashing lost profits, as expected in 2015 volumes in India to transfer 1 trillion USD.