More thoughts on growth in Asian consumer trends

Here's an excellent little story from an all time great stockmarket guru, Richard Russell, the editor-publisher for www.dowtheoryletters.com. I think his point illustrates my views exactly re: rise of the Asian consumer...

Richard Russell
A story: I'll never forget this item -- and it's a true story. An American executive was flying overseas, and he happened to be sitting next to a well-dressed Chinese gentlemen. They talked, and their conversation got around to the rather unique talents or abilities of various nations. They agreed that the talent of Americans was innovation and creative thinking. The Italians, they agreed, tended to be outstanding artisans. The French were born arguers, thinkers, and highly individualistic. "And what about you Chinese?" asked the American. "What is your outstanding talent?" The Chinese gentleman immediately answered, "We Chinese are obsessive learners."

I never forgot that remark, and I'm convinced that it's true. For instance, one of the constant complaints about the Chinese economy is about their rotten, inefficient, messy banking system, a system floating on bad debts and concealed losses.

So what are we reading about now? The Chinese are allowing the great American banks and investment companies to buy into their banking system. Morgan Stanley, JP Morgan, Goldman Sachs, Citigroup, Wells Fargo -- almost every month we hear of another great US outfit buying a multi-billion dollar percentage of a Chinese bank. And in the process the US banks are "fixing" the Chinese banks, showing the Chinese "how to do it." So when I read of these transactions I think of what the Chinese gentleman said. Yes, the Chinese are obsessive learners. And they're even eager to learn English. The Chinese government has instituted a crash program in the Chinese schools to teach English to hundreds of thousands of Chinese children. And as they rush into the global, capitalist world, the Chinese are now graduating hundreds of thousands of engineers and scientists.

As an aside, Business Week (Feb. 6, 2006) has a feature article entitled, "To Get Rich Is Glorious," which was a statement made by Chinese Chairman Deng Xiaoping. What the article is about is that China has become a hot bed for luxury goods. There are now 300,000 millionaires in China, and they are buying Prada shoes, Versace jackets, Piaget watches, gold bars and lots of diamonds. The great untalked-about fact -- there is a huge amount of cash sloshing around in China today. And a lot of it is being spent on luxuries.

Nuff said...Come on the Asian consumer!