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The powerful middle class in China
Q. How are they changing China?
A. The Chinese are shopping a lot more. Retail is booming like a wildfire in China. There are a lot more consumers and they are demanding a lot more services.
A lot of Chinese, especially younger consumers, are really into the luxury brands. They associate Western luxury brands with quality of life and sophistication. They want gyms, health care clubs and definitely travel. They want to see the world. The restaurant business is doing very well.
The younger generation people under 30 they are consuming like crazy. They save zero. They spend all of their salary on a Louis Vuitton purse. A lot of them stay with their parents so they don't have housing expenses. But once they get married, then they start to save.
Q. Are they concerned about the economy and their financial positions?
A. They know China is growing wildly, and they're very busy trying to catch this opportunity. They know China won't grow at this high speed forever and they know the window of opportunity will close. They know government won't take care of them anymore. They have to take care of themselves.
Q. What is the future of the Chinese middle class?
A. The Chinese middle class may grow to 700 to 800 million, which is 50% to 60% of China's entire population. In the past, all the predictions have proven to be too conservative.
But on the other hand, a lot of Chinese will be in the lower middle class because education will prevent them from moving up. If young people start going into vocational schools, that's for lower skilled jobs.
Asia's 25 hottest people in business
Q. and the rest of the world?
A. It means a lot of opportunities for American companies selling in China. companies are doing extremely well in China. While GM filed for bankruptcy a few years ago, their sales in China soared. Chinese consumers helped GM to turn around.
Nike is doing so well, Pizza Hut, Kentucky Fried Chicken. A lot of smaller companies are looking to sell into China. That will help the American economy.
Because of rising wages in China, we are already seeing some manufacturing jobs come back to this country. as well.
The same thing goes for the Western economy in general. Chinese consumers love Italian products. They want Italian products made in Italy.
Q,[url=http://www.sport.fr/smartphones/moncler.asp]femmes moncler[/url]. What are the barriers to entry for those still in poverty?
A. If you are born in urban China, you can go to public school and you enjoy a lot of government benefits. For rural Chinese, they have none of these. If you're born in the rural area, you can't even live in the cities. That's gradually changing. They let the rural people come into the cities to do the work. But there are still restrictions.
There is no future for people who live in the villages. There are still a lot of barriers for those people to move up the economic ladder.
First Published: April 25, 2012: 5:19 AM ET
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