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Chinese on Global Shopping Spree
      Author:Angus Loten     Source: http://cn.wsj.com     Release Time:7/18/2011 9:36:53 AM     View Times:6707
Here in the U.S., small-business owners are waiting for recession-weary consumers to start spending again. But what if they caught those same consumers on a shopping spree abroad?

That's the frustration China's cash-strapped small-business owners must be feeling as government data released this week revealed that Chinese travelers spent nearly $50 billion overseas last year becoming the biggest spenders in France and the U.K., with a growing appetite for luxury brands, according to the China Daily.

Some 57 million Chinese traveled abroad in 2010, up 20% from the previous year, a figure that's expected to grow 17% annually over the next decade amid rising incomes and aspirations, the report said.

Yet private consumption as a share of China's gross domestic product was less than 40% last year, compared to 60% in the U.S. and 70% in Japan, trade data shows. At the same time, more and more Chinese investors are pouring cash directly into foreign businesses at an unprecedented rate, including many small businesses in the U.S. (See Small Firms Find Cash Lifeline in China).

As a result, many Chinese small businesses are starving for cash. Last month, China's banking regulator enacted a series of measures aimed at helping local owners stay afloat, including fast-track bond issuance by commercial banks for small-business loans and higher bad-loan ratios for small and medium-sized enterprises.

Still, China's new wealthy and upper-middle class consumers traveling abroad aren't about to start pinching their pennies technically, their fens any time soon. High tariffs on imported goods and a stronger currency are making prices in overseas markets more attractive especially for brand-name luxury goods, which are at least 30% more expensive in stores back home, according an economist with the National Bureau of Statistic cited in the article.

None of that is likely to change without a major shift in the global economic landscape, the article notes.

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