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China: Economic Powerhouse
Matthew Sherwood
Senior Global Economist
Experian Business Strategies
[email protected]
 Experian, 2007
Presentation overview
• China today
• China in 2015 and beyond
• Implications for tourism
• Risks
 Economic downturns
 Politics
 Demographics
 Experian, 2007
Some key facts
• World’s fourth largest economy

Passes Germany this year

Passes Japan in 2012

Passes USA in 20??
• Impact on the world

Stronger growth

Higher oil prices

Slower wage rises

Cheaper clothes, sofas, etc.
• Did you know?

Accounts for only 12% of global manufacturing

Nearly half live on equivalent of $2 a day

Runs trade deficits with most countries
 Experian, 2007
Another golden age of globalisation
9
Advanced*
8
Developing
7
6
5
GDP, % change
4
3
2
1
'8
9'9
8
0
 Experian, 2007
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
Source: IMF, Experian Ltd.
* USA, Japan and Eurozone from 2007
Collectively rich, individually poor
US$ GDP in 2006 ($ trn)
14
40
12
35
10
30
8
25
20
6
15
4
a
In
di
na
C
hi
Ja
pa
n
U
K
In
di
Ch
i
a
0
UK
0
na
5
Ja
pa
n
2
U
S
10
US
 Experian, 2007
GDP per head
US$ ‘000
45
GDP by province
 Experian, 2007
Provinces are countries
Province GDPs: Some Are Now Very Big
($ billion 2005)
Liaoning
Shanghai
Hebei
Hungary
Henan
Zhejiang
HongKong
Portugal
Jiangsu
Norway
Shandong
Malaysia
Denmark
Guangdg
Greece
0
 Experian, 2007
50
100
150
200
250
300
350
GDP per head by province
 Experian, 2007
Developments in tourism, 2000-05
• Booming tourism industry
 Foreign visitors have doubled
 Number of travel agencies up by two-thirds
 Employment up by 50%
 Number of ‘tourist hotels’ up by 4%
• Visitor characteristics
 Half from Asia
 Britons lead W Europe
500,000 visits in ‘05
 Experian, 2007
Outbound tourism today
• Numbers have trebled

Where are they going?
Hong Kong
Korea
Rest of Asia
• Traveller characteristics

Shopping trips

Otherwise low-spend
Suburban hotels
Cheap meals
 Experian, 2007
Chinese tourists to the UK
• Less than 1% visit the UK
• Account for < 1% of UK
visitors, nights and spend
• Similar figures for Scotland

Around 7,000 visits a year

About 33,000 nights

Spend £4m
 Experian, 2007
Source: VisitBritain
China powers ahead
12
GDP, % change
10
8
6
4
2
0
2003 2005 2007 2009 2011 2013 2015 2017
 Experian, 2007
China: 2015 and beyond
• Incomes up twofold
 Still only one-tenth of US levels
 Growing disparities
Rich v poor
Rural v urban
• Politics
 Domestic unrest?
 Foreign relations
• Demographics
 One-child policy begins to bite
 Does China grow rich before it grows old?
 Experian, 2007
Av annual growth, 2005-2015
 Experian, 2007
Booming cities
City leaders in growth of income per head 2005-15
(per capita GDP growth, % average)
12.5
12
11.5
11
10.5
10
9.5
9
 Experian, 2007
Ho hho t
Hefei
Nanchang
Luo yang
Xinxiang
Xuchang
Inner
M o ngo lia
A nhui
Jiangxi
Henan
Henan
Henan
Hangzho u Zao zhuang
Zhejiang
Shando ng
Weihai
Xi'an
Shando ng
Shaanxi
Summary
• China today: a ‘poor’ economic power
• China in 2015 and beyond: starting to rival US
• Implications for tourism: take the long view
• Risks
 Growth: does it remain fast enough?
 Politics: social unrest?
 Demographics: rapid aging v rapid growth
 Experian, 2007
Experian Business Strategies
www.business-strategies.co.uk
 Experian, 2007