China's retail sales likely to surpass the U.S. for the first time in 2018

China's retail sales in 2018 are projected to catch up with and surpass those in the United States, in yet another sign of China's transition into an economic superpower, reports The Washington Post.

Chinese consumers queue up to buy goods in a store in Hangzhou, east China's Zhejiang Province on May 27, 2015. [File Photo: VCG]

The Washington Post cited data released by Japan's Mizuho Bank that said China's retail turnover in 2018 is to exceed 5.8 trillion U.S. dollars, very likely surpassing the retail turnover in the United States this year. A decade ago, retail turnover in China was only one-fourth of that in the U.S.

The report pointed out that the rapid growth in China's sales volume is supported by increases in wages, saying that the per capita income of the Chinese people over the past ten years has increased by three times from 2,000 U.S. dollars to 8,000 dollars. "It will be the first time that America is dealing with a market of equal size in potential trade wars. The ever-growing Chinese domestic market is its best bargaining chip," said Shen Jianguang, chief China economist for Mizuho Bank.

As two of the world's largest and most highly interconnected economies, any substantial changes to the trading conditions between the two countries might have a destabilizing effect. "Over 20 percent of the sales volumes of many U.S. multinational companies like General Motors, Boeing, and Apple come from the Chinese market," said Shen. This means that restrictions to the Chinese market will affect the turnover of U. S. companies.

The U.S. market is as important to China as the Chinese market is to the U.S., with the United States currently buying 19 percent of China's total exports. "China exports a substantial piece of its GDP to the United States. They are very dependent on our markets," said economist David Autor from the Massachusetts Institute of Technology.