TRADE OPPORTUNITIES IN THE CHINA MARKET
A Guide to the Filipino Businessman
A Summary of Articles by: Consul General Luis T. Cruz
Philippine Consulate General, Guangzhou
A.
Profile of the China Market
(Source: Retailing and Marketing in China, China Business Review Section, South China Morning Post, 12 March 1998).
- per capita net household income of urban residents increased from RMB 316 in 1978 to RMB 4,377 (US$527) in 1996 representing an indexed growth of 296 per cent;
- per capita net household income of rural residents rose from RMB 134 in 1978 to RMB 1,926 (US$232) in 1996, representing an indexed growth of 559 per cent;
- retail volume reached RMB2.48 trillion ($298.7 billion) in 1997, representing a 180 per cent growth since 1992;
- half of all disposable income is spent on food; other popular purchases are color T.V., hot water installation, bathroom fixtures, VCR, refrigerator, washing machines and mobile phones
Table 1. Per Capita Annual Expenditure by households
|
Object of Expenditure |
Rural (RMB) |
Urban (RMB) |
|
Food |
885.49 |
1,904.71 |
|
Clothing |
113.77 |
527.95 |
|
Residence |
219.06 |
300.85 |
|
Household facilities, articles and services |
84.22 |
298.15 |
|
Medicines and medical services |
58.26 |
143.28 |
|
Transportation and Communication |
47.08 |
199.12 |
|
Recreation, education and culture |
132.46 |
394.95 |
- China is increasingly becoming a critical, discerning and experienced consumer market; quality at low cost are preferred;
- the change from six-day work week to five-day work week gave rise to the leisure market;
- current trends indicate that urban residents spend less on consumer goods and more on housing, cars, holidays (tourism), insurance, pensions and securities;
- top consumer brands are gaining market at the expense of smaller and less well-capitalized manufacturers;
- foreign brands are specially strong on soft drinks, fast food, coffee, cosmetics, soap, shampoo and other cleaning products;
- future growth in the mainland’s vast rural markets remains to be exploited; they account for 72 per cent of the country’s 1.2 billion population; and
- rising rural incomes could translate into resurgent rural demands.
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