05.30.08
Back to root
After going back to China almost every month this year, I start to really appreciate my root a lot. Since I left China in 1986, there are tremendous amount of changes in that country every year. But it is only until recent few years I start to see not only infrastructure upgrade, but also human capital upgrade. For the first time, I see people make it big not because they have connections and know how to wine and dine, but because they work hard. I see government officials clearly and openly outline their 5 year plan and push hard to make change happen. I see construction and booming everywhere. The latest stats came out last month that consumer spending is growing 22% Y/Y in April 2008. As a matter of fact, China is the third-biggest consumer of luxury goods in 2005 that accounts for 12 percent of sales worldwide. The analysts expect China to be second-largest purchaser of luxury goods by 2015 and account for 29 percent of the world’s luxury sales. According to Goldman Sachs, China GDP will bypass US by 2040, but that’s assuming Chinese currency would stay flat. With current currency appreciation rate, I expect China GDP to pass US within the next 15 years. This is a figure business week mentioned in one of its articles a few weeks ago. From a technology perspective, China is the largest Internet countries in the world with 225M users and counting, 53% Y/Y growth in 2007. It is also the largest Cell Phone Market with 400M cell phone users vs 202M in the US at the end of 2007. Consider China cell phone penetration rate is only at 30+% vs 70% in the US, you can see why all the handset manufactures treat China as the most strategic target. So many possibilities and so little time…
