Wednesday, April 14, 2010

Rising Middle Class in China---Problem or Opportunity???

Two articles in ONE day in the same paper that refer to the rising middle class in China and the potential pent-up and/or new demand for not only domestic Chinese goods and services, but foreign goods and services as well (US goods/services??).  Where many see problems with China, I ask: Are there opportunities for American businesses to sell American made goods to them? Are smart companies doing this already?  Read below to find out...What do you think? Good, Bad, Indifferent??
 
WSJ: Diamond Traders See Sparkly Sales in China
ANTWERP, Belgium—This city's diamond district is recovering some of the shine it lost during the financial crisis thanks to a hungry new customer: China.  Exports of polished diamonds from Europe's diamond capital to China, including Hong Kong, increased 55% to $737 million in the first three months of 2010, the Antwerp World Diamond Centre said Tuesday.  That makes China the biggest buyer of diamonds from Antwerp, knocking the U.S., traditionally its largest customer, into second place.  The booming Chinese market, fueled by the world's fastest-growing middle class, is proving a strong antidote to slipping sales in more established markets like the U.S. and Europe. A recent report by consultants KPMG forecasts China will become the world's largest diamond market next year
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WSJ: Starbucks Plans Big Expansion in China

 —Starbucks Corp. Chief Executive Howard Schultz said China is set to usurp Japan as its biggest market outside North America, as the coffee titan plans to open "thousands of stores" in China over time. He also said the Seattle-based chain was eager to crack the potentially lucrative Indian and Vietnamese markets, where it doesn't yet have a presence.  "Asia clearly represents the most significant growth opportunity on a go-forward basis," said Mr. Schultz, in an interview.  Starbucks has searched for new areas of growth following a deep retrenchment in the U.S. during the past year, which involved Starbucks closing hundreds of underperforming stores and shaving nearly $600 million of costs.  Mr. Schultz says the company has turned its fortunes around, allowing it to now shift its attention to international markets. In January, Starbucks reported its first quarter of same-store sales growth since the end of 2008.  But he said the company would plan its China growth carefully. "Over time there will be thousands of stores in China," said Mr. Schultz. "But it's a complicated market that requires significant discipline and thoughtfulness."  Despite its long presence in the Chinese market—Starbucks opened its first shop in Beijing in 1999—the coffee company has only 376 stores on the China mainland, compared with 878 in Japan. The retailer has more than 11,000 outlets in the U.S,
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