China's double boom: From ‘Made in China’ to ‘Sell to China'

China's export growth model hit a wall. So it reinvented itself.

WEIJIAN SHAN: You have to remember, this is a country of 1.4 billion people – four times the population size of the United States. And China has become a major market for many of the American companies. China has been known as exports for a long time was the engine of China's economic growth, along with a lot of investments, representing about 50% of GDP. No other country has invested so much as China in the past 10 years, largely because China has the highest savings rate in the world. When I say no other country has invested as much, I mean any country, at any time in history, at any stage of their industrialization process.

But China's growth model exports peaked about 10 years ago, representing about 36% of GDP. Today, it has fallen to 19% of GDP. So export is no longer the engine of economic growth. And if you look at investments, it has come down as well. So what China is doing is to shift its growth model, growth engine, away from exports and investments to private consumption, which 10 years ago represented about 35% of GDP, and today is more than 50%. So for American companies like Apple, China is no longer the factory of the world. It has become a market of the world. And the Chinese market has become very significant. For Apple, it's 20% of its sales-- about $50 billion. For a company like Qualcomm, 65% of its sales. Skyworks Technology is more than 80%, and I think it's 84% of their sales. You have Starbucks, you have Boeing. And all these companies have very large market shares in China. General Motors today sells more cars in China than in the United States, Mexico, and Canada combined. That is, General Motors sells more cars in China than they sell in North America. So that's how significant the China market has become. Chinese private consumption now is about $5 trillion, more than 10% of the entire private consumption expenditure last year. So we should view China has a market of the world as opposed to the factory of the world.

I think there are many misperceptions in the United States about China. And there's no question about it. I think so much is written about China, yet so little is understood about this country. And that's why I thought my book, Out of the Gobi, is quite relevant. My view is that if you don't understand the modern history, most recent history of a country, you won't be able to understand the country. It's like here in the United States, if you don't know about the Civil War, if you don't know about civil rights movement, then you won't be able to understand the United States. So I think to know something about the history of China, especially the most recent history in our lifetime, will be very useful to dispel the misperception and to have better understanding of that country.

  • China is no longer an impoverished manufacturer of the world's products; it is a major consumer market of 1.4 billion people.
  • When its manufacturing boom hit a wall, China changed tactics and invested heavily in consumerism at home – a second boom that will make China king.
  • Global brands are desperate for a piece of China's $5 trillion private consumer market.


Photos: Courtesy of Let Grow
Sponsored by Charles Koch Foundation
  • The coronavirus pandemic may have a silver lining: It shows how insanely resourceful kids really are.
  • Let Grow, a non-profit promoting independence as a critical part of childhood, ran an "Independence Challenge" essay contest for kids. Here are a few of the amazing essays that came in.
  • Download Let Grow's free Independence Kit with ideas for kids.
Keep reading Show less

Withdrawal symptoms from antidepressants can last over a year, new study finds

We must rethink the "chemical imbalance" theory of mental health.

Photo Illustration by Joe Raedle/Getty Images
Surprising Science
  • A new review found that withdrawal symptoms from antidepressants and antipsychotics can last for over a year.
  • Side effects from SSRIs, SNRIs, and antipsychotics last longer than benzodiazepines like Valium or Prozac.
  • The global antidepressant market is expected to reach $28.6 billion this year.
Keep reading Show less

Is there a limit to optimism when it comes to climate change?

Or is doubt a self-fulfilling prophecy?

David McNew/Getty Images
Politics & Current Affairs

'We're doomed': a common refrain in casual conversation about climate change.

Keep reading Show less

Four philosophers who realized they were completely wrong about things

Philosophers like to present their works as if everything before it was wrong. Sometimes, they even say they have ended the need for more philosophy. So, what happens when somebody realizes they were mistaken?

Sartre and Wittgenstein realize they were mistaken. (Getty Images)
Culture & Religion

Sometimes philosophers are wrong and admitting that you could be wrong is a big part of being a real philosopher. While most philosophers make minor adjustments to their arguments to correct for mistakes, others make large shifts in their thinking. Here, we have four philosophers who went back on what they said earlier in often radical ways. 

Keep reading Show less

What should schools teach? Now is the moment to ask.

The future of learning will be different, and now is the time to lay the groundwork.

Future of Learning
  • The coronavirus pandemic has left many at an interesting crossroads in terms of mapping out the future of their respective fields and industries. For schools, that may mean a total shift not only in how educators teach, but what they teach.
  • One important strategy moving forward, thought leader Caroline Hill says, is to push back against the idea that getting ahead is more important than getting along. "The opportunity that education has in this moment to really push students and think about what is the right way to live, how do we do it and how do we do it in a way that doesn't hurt or rob the dignity of other people?"
  • Hill also argues that now is the time for bigger swings and for removing the barriers that limit education. The online space is boundary free and provides educators with new opportunities to connect with students around the world.

Keep reading Show less