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Dogs, Coach, and Cars

Oct 28, 2010 • Demand, Supply, and Markets, Households, Innovation, Macroeconomic Measurement • 118 Views    No Comments

When you have extra income, what do you buy? In China, the more affluent consumer is buying dogs, Coach handbags, and cars.

Banned in Beijing in 1983, only recently, the dog has returned as a new “best friend.” A stress reliever, a response to “one child,” and a status symbol, dog ownership in Beijing totals 900,000 and is rising. Correspondingly, dog treats, dog care, and pet parks all have growing sales.

China’s middle class also is buying Coach handbags and cars. In its recent conference call, Coach said it is opening 4 new stores for a total of 49 in China. GM also identifies China as a source of sales growth.

The Economic Lesson

In the US, the consumer started to play a major role in the US economy during the 1920s. Buying cars, radios, and refrigerators for the first time, the consumer propelled economic growth.

With their potentially gargantuan numbers, might a growing Chinese middle class stimulate growth at home and in the US?

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