Growing Buying Power for Asian Consumers

SINGAPORE, Singapore (Jan 11) - For the first time in more than three decades Japan's economy, the world's second largest, is set to be surpassed in size by the rest of Asia. That milestone, according to Lehman Brothers analists, signals the arrival of the Asian consumer as a key growth driver and probably marks the turning point for Asia's export-led economic model. While only a small number of Asia's more than 3 billion people are moving up to middle-class income levels, analysts say the numbers are growing faster than any other region worldwide, fuelling a consumption boom. More and more people are shifting from consumption for basic necessities to discretionary consumption -- like taking a holiday abroad, going out to restaurants, visiting malls. The Asian middle class is described as those who earn more than US$5,000 per year. As many as 80 million people in China, 15 million in Thailand, 12 million each in India and Indonesia, 9 million in Malaysia and 6 million in the Philippines make the grade by that measure. Another 200 million or so in India now have annual income above $1,500 and they are buying shampoos, toothpaste, bicycles and other basic consumer goods. In China, an economic census found the country had under-reported its booming services industries and GDP was 16.8 % larger than previous estimates in 2004 - making China the world's fourth-largest economy in 2005. The Asian consumption upturn could still hit a roadblock if oil prices stay around current levels or if birdflu escalates into a pandemic.