China s final consumption expenditure

During the last decade, China has managed to halve the share of exports of goods and services in its GDP from 36.0 % in 2006 to 18.4 % in 2019 according to World Bank data, thus becoming less reliant on exports. However, in 2018, China’s final consumption expenditure as a share of its GDP was 55 %, down from a peak of 67.4 % in 1983. This is extremely low compared with other big emerging economies (Figure 5) such as Brazil and India (85.7 % and 70.4 % respectively) and with advanced economies such as Canada, Germany and the US (79 %, 72 % and 82 % respectively). At 38.8 % (2019), the share of Chinese private household consumption in nominal GDP is particularly low. Therefore, there is a huge unexploited potential for both Chinese and foreign companies to tap into.