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Profiting From the New Chinese Consumerism

Source: http://Blog.QualityStocks.net/?p=17200
Posted on Friday, August 14th, 2009 | In Market Commentary, Small & Micro Cap
Contributed by: QualityStocks (http://QualityStocks.net) -

Despite the mis-informed opinions that flow from some on Wall Street, China is becoming less and less dependent on exports to the U.S. More demand for products is coming from China itself.

Recent shipping container points to this change. A year ago there were only 56 tons of Chinese imports for every 100 tons of Chinese exports. One year later, this figure has grown to 80 tons of Chinese imports for every 100 tons of Chinese exports. This is a dramatic change for just one year.

Retail sales also support the idea that the Chinese consumer is beginning to spend. For the first half of 2009, overall retail sales in China rose by 15% – a figure that American retailers would love to have. The rise in retail sales is due in part to massive spending by one segment of the population – women under the age of 35.

This trend looks likely to continue. A recent survey was conducted which surveyed female consumers in China. 80% of the respondents to the survey said that they expected to spend more in the next six months than in the past six months. No consumer slowdown here.

Women in China now contribute about half of household income, up from 20% decades ago. Their educational opportunities have grown and they have entered the white-collar workforce. Therefore, female consumers have become a major driving force behind China’s economic growth, yet they remain little understood among U.S. investors as an influence on household budgets and the Chinese economy overall.

There are lots of opportunities for American investors to jump on the trend of increased consumer spending in China. Here are some of them:

Investors can purchase American multinationals with large exposure in China. Examples include: Yum! Brands (NYSE: YUM), Coca-Cola (NYSE: KO), and Walmart (NYSE: WMT).

Investors can also directly purchase Chinese companies such as: Baidu (NASDAQ: BIDU), China Mobile (NYSE: CHL), China Nepstar (NYSE: NPD) and Ctrip.com (NASDAQ: CTRP).

Let us hear your thoughts below:

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