Goldman Sachs Asset Management chairman Jim O’Neill believes that China could challenge the US as the world’s largest consumer by 2025.
"The implications of this development for global markets and consumer-related sectors in particular – including consumer durables, luxury goods and travel and tourism – remain dramatic," said O’Neill, who famously coined the acronym BRIC for the world’s leading four emerging nations – Brazil, Russia, India and China.
He said the growth of Chinese consumers could also propel the combined market capitalization of China’s listed companies beyond America’s by 2030.
Goldman Sachs economists predict that by 2025, China’s consumption-to-savings ratio will grow from 35% to 55% while over the same period, the ratio for US consumers will fall.
Global Pensions reported O’Neill as saying that by 2025, China’s luxury goods market could grow 18 times its present size to US$328 billion, and account for almost US$1 for every US$3 spent on luxuries globally.