China Could Become World’s Top Consumer Market By 2020 (Video)

Fan Cheuk Wan Of Credit Suisse Says Domestic Demand Should Help Rebalance Lower Export Demand

Fan Cheuk Wan of Credit Suisse

This week, Fan Cheuk Wan of Credit Suisse spoke to CNN about the possibility that China could overtake the U.S. to become the world’s largest consumer market by 2020. Fielding questions about what could drive Chinese consumers to spend more and save less, an issue that concerns broader issues like the country’s lack of a social safety net, Fan says that income reform and “substantial” growth in labor wages will be the catalysts for more individual spending in the next decade.

Addressing the need for a social safety net in China to provide more financial security, which would then encourage lower savings rates, Fan says that while this reform is “critical,” the “significant accumulation of private wealth” in China will naturally provide a measure of financial security and drive more private consumption. Additionally, Fan points out that the strengthening of the yuan will in turn strengthen the buying power of Chinese consumers, increasing demand for imported consumer products.