Domestic consumption will reap benefit of China's five-year plan

ON ASIA

HSBC's Richard Wong says the increased spending power of Chinese consumers will continue to drive the country's economy.

Areas of the Chinese stock market that focus on domestic consumption are likely to be beneficiaries of the government’s 12th Five-Year Plan, which starts in 2011. One of the plan’s outcomes was that the government is now more focused on ensuring companies are not underpaying workers. With higher wages, workers will have more discretionary income and enjoy a better living standard, which will boost domestic consumption, which is coming from a low base. Consumption in China currently accounts for only around 37% of GDP, which is low even compared to other emerging markets such as India ...