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September 5, 2009

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Home » Business » Economy

Spending to double in 25 cities

A QUARTER of the top 100 cities in China are expected to double their consumption by 2015 as domestic demand catches up with economic growth, according to a McKinsey & Co report yesterday.

Twenty-five cities, including Beijing, are expected to at least double their consumption demand in 2015 from 2008 while 26 cities including Shanghai are expected to be on par with economic growth, the consultancy said yesterday in Shanghai.

"The momentum of economic and social change in China is so great that the global financial downturn appears to have caused only a temporary dip on an otherwise long and steep road to growth," said McKinsey in the survey.

China's top 100 cities accounted for about 52 percent of the nation's total consumption.

"Consumption is expected to accelerate to match economic growth - an improvement compared to the last decade," said McKinsey.

The firm forecast China to post an annual compound growth rate of 10 percent in its economy and domestic consumption by 2015.

Export-oriented cities, such as Guangzhou and Shenzhen in southern Guangdong Province, saw their consumption curbed by the global financial fallout.

The report also showed that consumers aged 25 to 44 are the most affected by the financial downturn because they are more burdened with greater financial obligations such as mortgages, card repayments and school-age children.


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