China Biggest Luxury Cars Market by 2020

China is steadily growing to become the world's biggest market for luxury cars. According to McKinsey, the Asian giant will have surpassed the United States by 2020.

Even though luxury car sales are expected to grow within the United States for the years to come, sales in China are and will continue to boom. Over the past decade, China's market for premium cars has grown 36 %. A year.

Government 
In the past this immense growth was spurred by government officials  Their numbers and budgets grew excessively and resulted in double digit growth for Western manufacturers like BMW and Audi.

Upper-class
Nowadays, government officials only make up one tenth of the Chinese luxury cars market. Still, demand is growing because of women and younger drivers coming from the new rapidly growing high income class.

Competitive car
Surprisingly, China itself is still not able to produce competitive luxury cars. Despite many joint ventures with Western firms and copying best R&D practices, China cannot, and probably will not be able to over the next decade, build a globally competitive car. 

Thus, there are plenty of opportunities for Western manufacturers to spur global profits despite their falling domestic demand. 

Rapid urbanization spurs growth in emerging markets

Rapid urbanization spurs growth in emerging markets. As a result the world's economic balance shifts towards the east and south. 

According to the McKinsey Quarterly, a consumer class with more than 4 billion people will be created by this trend in 2025. In 1990 this group comprised only one billion members. 

New Urban Areas
By 2025, half of this new consumer class will live in the emerging world cities. Together, these nearly 440 new urban areas will account for nearly 50% of the expected global GDP growth between 2010 and 2025.

Read the article: Unlocking the potential of emerging-market cities

Check out the interactive map with city specific highlights about these new economic hot spots in 2025 >>

How long can the Chinese growth last?

According to IMF economists Mitali Das and Papa N’Diaye, China's growth is about to reach a turning point.

Within a decade, higher labour costs and an aging population will result in diminishing returns on capital investments.

Abandoning the one-child policy and spurring innovation might be the key to turns things around.

Click here to read the full IMF working paper on China's growth >>

Dramatic Global Shift Of Economic Power

The global economic balance of power will shift dramatically over the next 50 years. Current world powers will fiercely loose ground to emerging economies. 

According to the latest OECD projections, the United States will cede it's place as the world's largest economy to China as early as 2016. And India will also surpass the current economic # 1 on the long term. 

G7
Put together, China and India will overtake the combined economies of the G7 nations. Traditional economic giants such as Japan and the European Union, will loose ground to emerging nations with younger populations, such as Brazil and Indonesia.

Explore the full OECD report >>

Four Reasons Why Africa's Economy Is Rising

There are four reasons why the economy of Africa is booming. According to two World Bank economists, the causes of Africa's new success are:

1. Africa has the right kind of population growth.
   
2. Rapid urbanization is creating efficiency gains and attracting capital.
   
3. Technological progress has a relatively larger impact on Africa than anywhere else, because of the low start base where the continent is coming from.
   
4. Governance and economic management by officials can improve, also from very modest beginnings.

To explore the complete reason's for Africa's sudden success, read the full story.

Read Economist article Bulging in the Middle >>

Is Factory Asia Finished?

The heyday of 'factory Asia' may be ending sooner than anyone has ever thought, according to The Economist.  

The article states that much of Asia needs to learn the lesson. Switch from an export-oriented production economy to service industries. 

Read the full article Now for the soft part >>