UBS: China, India Set To Sweep Aside U.S. As World's Top Consumer Markets

By Agence France-Presse Consumers in China and India will easily outstrip the United States as the world's largest consumer markets within 25 years, the Swiss banking group UBS forecast in a study released Aug. 23. Their combined purchasing power will be five times that of U.S. consumers by 2030 even in the most conservative projection of "modest productivity," according to UBS. The study, which took into account a range of likely consumption and savings patterns, as well as different models for economic growth, said an increase in global trade was necessary to meet the consumer boom in the two developing countries. Although China and India are engaged in challenging economic reforms to overcome inefficient state industries and weak financial systems, UBS said they were "well placed to succeed." India's relatively young population gives it higher potential for growth than China, but that could also imply a higher savings rate and more restrained consumption. By contrast, China's more elderly population is likely to devote a greater share of its income to consumption, UBS said. Despite the "considerable opportunities" and recent rapid economic expansion, UBS underlined that global investors in the world's two most populous countries "have frequently been disappointed during the past two decades." But regulatory environments in the Asian giants were changing, while ongoing liberalization would help make markets including agriculture, retailing, financial services and real estate more efficient, it added. Copyright Agence France-Presse, 2004