China's Domestic Toy Market

As we all know, China is home to roughly a bazillion people. What if Chinese citizens were to finally start spending their money on consumer goods like people do in the US, Europe, South America and Japan? 

That’s the question the New York Times raised in an excellent editorial on October 27, 2008. Entitled “As China Goes, So Goes …” As the opinion piece puts it: “Over the last 30 years, China has hitched its economy to the industrial world, exporting cheap goods to the United States and other developed nations…As those industrial economies sputter, China is now in a position to pick up some of the slack: selling more of its own goods at home and buying more from the rest of the world.”

The editorial notes that the Chinese government continues to pursue an export strategy. It froze the Yuan against the dollar this summer and is increasing rebates on taxes to exporters. The paper points out, however, that China has a lopsided economy with consumer spending amount[ing] to little over a third of economic production, probably the lowest share in any country in the world. And its overwhelming dependence on exports has made it extremely vulnerable to changes in world demand.

The New York Times notes that by incentivizing its domestic economy, China would not only help itself but the world in general by creating a market for, of all things, imports.

On behalf of Toy Nation, I can only say, amen.