The Greatest Consumption Story in Modern History.docVIP

The Greatest Consumption Story in Modern History 　　STEPHEN S.Roach,chairmanof Morgan Stanley Asia,hasquipped that Chinas 12th Five-year Plan is likely to spark thegreatest consumption story in modernhistory.He pointed out that the 12thFive-year Plan focuses on three majorpro-consumption initiatives,which willboost private consumption as a share ofChinese GDP from its current reading ofaround 36 percent to somewhere in the42 to 45 percent range by 2015.It wouldalso be a huge boost for Chinas majortrading partners-not just those in EastAsia,but also in the growth-constrainedEuropean and U.S.economies.　 The backdrop for this is how Chinaweathered the 2008 global financial cri-sis.The meltdown did produce a dip inChinas economy.In fact,the PurchasingManagers Index (PMI) of Chinas manu-facturing sector dropped to a record lowof 38.8 percent in November of 2008.PMI can reflect the entire economy of acountry.A reading below 50 percent ringsan alarm bell for economic slowdown.Inside Job　 The Chinese government reacted im-mediately to warning signs by adoptinga stimulus package estimated at RMB 4trillion and a series of loose monetarypolicies.The main contents of the pack-age plan were: first,to boost domesticdemand; second,to implement an in-dustrial rejuvenation program; third,toencourage progress and innovation inscience and technology; and fourth,toraise the level of social security.Thesemeasures did not disappoint.Chinaseconomy resumed stable and briskgrowth last year.A key indicator was itsrational growth rate for the later half ofthe year, stated Zheng Xinli during thisyears session of Chinese Peoples Politi-cal Consultative Conference (CPPCC)in March.Zheng is a CPPCC delegateand vice chairman of the China Centerfor International Economic Exchanges(CCIEE).He also made the optimisticprediction that Chinas economy willmaintain last years growth dynamics in2Ol1,　 In 2010,while the worlds economygrew by only 4.5 percent,Chinas GDPexpanded by 10.3 percent.The gain is11.