Sales of passenger cars fell for the seventh consecutive month by 17.7% year-on-year, the largest fall in seven years. Photo: AFP

Consumption can support rapid economic growth in China for 20 years, as there is still great potential for increasing sales of automobiles and homes, 21st Century Business Herald reported.

Currently, retail sales growth is slowing considerably, even lower than the nominal GDP growth rate, which is abnormal.

Automobile sales saw negative growth of 2.4% in 2018, while consumption of construction materials and household appliances increased by 8.1% and 8.9%. Meanwhile, the total housing area sold decreased by 6.4 percentage points.

However, insiders believe China’s consumer market still has great potential. Take the automobile as an example. In 2018, only about one-third of families in China had cars.

The demand for cars in China is about 800 million, including the existing 200 million cars. It will take 30 years to fill the gap of about 600 million if annual production is 30 million vehicles. If production is increased by 10% each year, it will take 16 years.

Also, in the next two or three decades, the housing demand created by population growth and urban redevelopment will be between 100 and 200 million homes. And it takes more than 20 years to build that many homes if the annual average capacity is 7 million homes.

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