How quickly can China grow its own market? Long reliant on others to turn its economic wheels, China is spending internally in hopes of creating its own domestic market. According to the Wall Street Journal (2/10/09), domestic consumption was 39% of China's gross domestic product last year, compared to 69% of GDP in the U.S.
The government is particularly focusing on rural areas and providing incentives ranging from 13% electronic goods subsidies to one time cash gifts ranging from $13-$26 per household (a large sum of money for residents earning $700 per year).
The Chinese households are renown for their high savings and low debt. Until the government addresses their social services and health care inadequacies, the Chinese will continue to save and not spend.
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