Consumption

Editor note: This article, originally published in inmediahk.net, tells how a small company can turn into giant enterprises through the mysterious network and relationship with officials.

Despite incredibly high growth arate, China economy is always characterized by its insufficiency of domestic demand. In other words, the ordinary people do not want or are not able to consume as much as the producers expect. Where have the money gone? Some put money into their bank account. But most people's purchasing power is much weaker than economic development. The annual growth rate of income is only 6-7% but GDP increases at about 15% each year. It is estimated that the supply of consumer goods exceeds demand by 70%. Now the average Chinese people make only RMB 700 (less than US$100) each month. How could they afford the way of life of high consumption?