Andy, thank you for your characteristically clear analysis. I would, however, like to offer one small point of critique.
The comparison that leaves China as “the world’s second-largest consumer market” relies on the aggregate of household final consumption expenditure, which combines goods and services. This has the unintended effect of exaggerating the American market because U.S. services — healthcare, insurance, education, financial management — are far more expensive than elsewhere. The high costs are not a sign of greater real consumption, but of structural inflation and what might be called professional bloat: a broken leg with Ambulance transfer in New York may cost $30,000, while in Beijing it may be closer to $1,000.
When services are included indiscriminately, the U.S. retains the lead. But if the focus shifts to goods consumption — automobiles, electronics, food, clothing, home appliances, and even luxury items — China already ranks first by volume and in many cases by value. This matters because global businesses selling tangible products find their primary demand base in China, not in the United States.
In that sense, China is not only the fastest-growing consumer market, but already the world’s largest in the categories that most directly shape global trade.
Andy, thank you for your characteristically clear analysis. I would, however, like to offer one small point of critique.
The comparison that leaves China as “the world’s second-largest consumer market” relies on the aggregate of household final consumption expenditure, which combines goods and services. This has the unintended effect of exaggerating the American market because U.S. services — healthcare, insurance, education, financial management — are far more expensive than elsewhere. The high costs are not a sign of greater real consumption, but of structural inflation and what might be called professional bloat: a broken leg with Ambulance transfer in New York may cost $30,000, while in Beijing it may be closer to $1,000.
When services are included indiscriminately, the U.S. retains the lead. But if the focus shifts to goods consumption — automobiles, electronics, food, clothing, home appliances, and even luxury items — China already ranks first by volume and in many cases by value. This matters because global businesses selling tangible products find their primary demand base in China, not in the United States.
In that sense, China is not only the fastest-growing consumer market, but already the world’s largest in the categories that most directly shape global trade.
fair point, thanks