Experian, 2007 China: Economic Powerhouse Matthew Sherwood Senior Global Economist Experian Business Strategies [email protected].

Experian, 2007

China: Economic Powerhouse

Matthew Sherwood

Senior Global EconomistExperian Business Strategies

[email protected]

Experian, 2007

Presentation overview

• China today

• China in 2015 and beyond

• Implications for tourism

• Risks Economic downturns Politics Demographics

Experian, 2007

Some key facts

• World’s fourth largest economy Passes Germany this year Passes Japan in 2012 Passes USA in 20??

• Impact on the world Stronger growth Higher oil prices Slower wage rises Cheaper clothes, sofas, etc.

• Did you know? Accounts for only 12% of global manufacturing Nearly half live on equivalent of $2 a day Runs trade deficits with most countries

Experian, 2007

Another golden age of globalisation

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1

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9Advanced* Developing

GDP, % change

Source: IMF, Experian Ltd.

* USA, Japan and Eurozone from 2007

Experian, 2007

Collectively rich, individually poor

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45 GDP per headUS$ ‘000

US$ GDP in 2006 ($ trn)

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GDP by province

Experian, 2007

Provinces are countries

Province GDPs: Some Are Now Very Big($ billion 2005)

0 50 100 150 200 250 300 350

Greece

Guangdg

Denmark

Malaysia

ShandongNorway

Jiangsu

Portugal

HongKong

ZhejiangHenan

Hungary

Hebei

Shanghai

Liaoning

Experian, 2007

GDP per head by province

Experian, 2007

Developments in tourism, 2000-05

• Booming tourism industry Foreign visitors have doubled Number of travel agencies up by two-thirds Employment up by 50% Number of ‘tourist hotels’ up by 4%

• Visitor characteristics Half from Asia Britons lead W Europe

500,000 visits in ‘05

Experian, 2007

Outbound tourism today

• Numbers have trebled Where are they going?

Hong Kong

Korea

Rest of Asia

• Traveller characteristics Shopping trips Otherwise low-spend

Suburban hotels

Cheap meals

Experian, 2007

Chinese tourists to the UK

• Less than 1% visit the UK

• Account for < 1% of UK visitors, nights and spend

• Similar figures for Scotland Around 7,000 visits a year About 33,000 nights Spend £4m

Source: VisitBritain

Experian, 2007

China powers ahead

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2003 2005 2007 2009 2011 2013 2015 2017

GDP, % change

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China: 2015 and beyond

• Incomes up twofold Still only one-tenth of US levels Growing disparities

Rich v poorRural v urban

• Politics Domestic unrest? Foreign relations

• Demographics One-child policy begins to bite Does China grow rich before it grows old?

Experian, 2007

Av annual growth, 2005-2015

Experian, 2007

Booming cities

City leaders in growth of income per head 2005-15(per capita GDP growth, % average)

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9.5

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10.5

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11.5

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12.5

Hohhot Hefei Nanchang Luoyang Xinxiang Xuchang Hangzhou Zaozhuang Weihai Xi'an

InnerMongolia

Anhui J iangxi Henan Henan Henan Zhejiang Shandong Shandong Shaanxi

Experian, 2007

Summary

• China today: a ‘poor’ economic power

• China in 2015 and beyond: starting to rival US

• Implications for tourism: take the long view

• Risks Growth: does it remain fast enough? Politics: social unrest? Demographics: rapid aging v rapid growth

Experian, 2007

Experian Business Strategies

www.business-strategies.co.uk