ZHONG GUO - THE MIDDLE KINGDOM

ZHONG GUO - THE MIDDLE KINGDOM
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Oct 22, 2009

A Consumer Paradigm for China by McKinsey Quarterly

China's stimulus package has certainly helped to keep its economy afloat. However, long term behavioral changes within the people need to occur to continue China' economic growth. Industrialization and export intensive industries allowed China to develop into one of the largest economies in the world over the past 3 decades. To continue what has become "the norm" of annual double digit growth, habits must change.

Much of China's high savings behavior is a result of centuries or even millennia of uncertainties created by the government. As a result, stuffing money is your mattress was one of the only ways to guarantee future survival. Given the upheavals of The Great Leap Forward and Cultural Revolution, more recent policies, obviously, have not done much to assuage their fears.

Clear steps need to be taken to make sure that this strategy is taken in order to continue to fuel China's economy.

To be continued...