BOSTON (October 18, 2012) – As the Presidential debates have highlighted, Americans are wary of China’s growth and trade practices. That attitude could seriously backfire on the U.S. economy, contend experts at The Boston Consulting Group (BCG).
A new survey by the firm has found that nearly half – 46 percent – of Americans believe China’s growth will have a negative impact on the U.S. economy. Only 20 percent of Americans said they disagreed with this sentiment, and more than a third said they didn’t have an opinion.
“Americans have been sold a bill of goods by their media and politicians, who have led them to believe China’s growth is America’s loss,” said Michael J. Silverstein, a BCG senior partner and coauthor of the new book The $10 Trillion Prize: Captivating the Newly Affluent in China and India. “That's not the case. It’s not a zero-sum game.”
Silverstein contends that many Americans and American companies fail to appreciate that China represents the largest consumer-market growth opportunity in history. “Imagine 1.3 billion people with annual incomes rising from $4,000 to $12,000 over the next decade. They want brands, and they want our brands. The overwhelming China-bashing that Americans hear in the media needs to change if we are to realize this opportunity. We have the resources and intelligence to become China's largest trading partner and to capture the huge economic benefits that will flow from that.”
The results of BCG's survey, which included 4,000 consumers in China, the U.S. and the U.K. and was fielded in August 2012, underscore the opportunity. Forty percent of Chinese consumers said they are planning to spend more money in the next 12 months than they did in the past 12, ensuring they will continue to be an engine of consumer expenditure for the global economy. This level is up from 36 percent in 2011 and 23 percent in 2010 – despite the temporary slowdown in the Chinese economy. By contrast, only nine percent of U.S. and U.K. consumers in the 2012 survey said they are planning to spend more in the next year.
Notably, 80 percent of Chinese think their children will have a better life than they did, compared with just 24 percent in both the U.S. and U.K.
Thirty percent of U.K. consumers (compared with 46 percent of Americans, as mentioned above) said they believed China’s growth will be bad for their economy, and 44 percent did not agree or disagree with that sentiment.
These survey findings coincide with the launch of the The $10 Trillion Prize (Harvard Business Review Press, October 2012), which describes the expected growth in spending in China and India between 2010 and 2020. By the end of the decade, consumers in the two countries are projected to spend nearly $10 trillion annually – three times the amount they spent in 2010. The book – a manual for business leaders who want to capture a slice of the prize – argues that the West risks squandering the spectacular opportunity if countries and companies fail to develop enduring commercial ties with China’s and India’s newly affluent consumers.
For more information, please go to www.bcgperspectives.com/tentrillionprize.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or firstname.lastname@example.org.