China's attempt to re-focus the economy on consumers appears to be paying dividends - the services sector is expanding. And, as David Pollard reports, that means rich pickings for some foreign businesses, like Starbucks and McDonalds.
It hasn't exactly been to everybody's taste. Not least of all the rest of the world. China's slowing demand forcing difficult adjustments to global trade as it moves to a consumer-led economy. But Chinese consumers are certainly leading the way - and that's an opportunity for major foreign firms. McDonalds plans to open more than 250 restaurants this year. Starbucks says it opened 150 outlets in the last quarter. FXPro's Simon Smith. (SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING: "Yes, the focus is more on consumption .... people are moving up the income chain and the value chain does create massive opportunities. It is a huge market, it is tens of times bigger than any of the European economies in terms of population." Industrial heavyweights are suffering. Take Siemens: its CEO Joe Kaeser spoke of double-digit declines in China when he briefed investors last week. The flip-side to that story is retail sales up 11.1 per cent in December. Ford reporting a 27 per cent increase in Q4 sales. And - from Apple boss Tim Cook - predictions of a 10-fold increase in China's middle class - to a half a billion - by the end of the decade. (SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING: "The slowdown there is, it's happening, it's wanted, it's to a fair degree welcome because you can't keep growing at a double digit pace as it has done in the last very very many years. The switch to a more service orientated economy, let's say, or more consumer based is not something that happens in a matter of one or two years." Growth for Starbucks is happening even before consumers fully adopt Western habits - like the morning coffee break. When that happens, expect more growth, it says. Far from half empty, China's consumer demand a glass getting fuller, it seems, by the day.