Home' Trinidad and Tobago Guardian : October 1st 2015 Contents BG22 THE ECONOMIST
BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 1 • 2015
The comedian Joan Rivers, who died last
year, did not let chores get in the way of a
career in show business.
"I hate housework," she joked. "You make
the beds, you do the dishes and, six months
later, you have to start all over again."
An escape from unpaid drudgery into paid
work seems a distant prospect for millions of
women. In South Asia, for instance, women
carry out as much as 90 per cent of unpaid
care work, including cooking, cleaning and
looking after children and the elderly. They
are far less visible than men in work outside
Women make up less than a quarter of the
paid work force in India and account for only
17 per cent of GDP, a measure of output that
excludes unpaid work. By contrast, women
contribute 41 per cent of GDP in China.
A new report from the McKinsey Global
Institute, a London-based think tank, under-
lines how gender inequality in work and society
is itself distributed unequally across the world.
The number-crunchers at McKinsey calculated
gender-parity scores, gauges of how women
fare at work and in society in comparison with
men, covering more than 90 per cent of the
world s population.
They reckon that South Asia, India excluded,
is the global laggard with a score of 0.44, with
a score of one representing perfect parity
between the sexes. Richer parts of the world
do much better, but still are a long way from
complete gender equality. North America and
Oceania, the best-ranked regions, have a score
It is hard to put a number on the social
costs of this, but the McKinsey folks take a
stab at estimating the loss of economic output
that goes with it. Other studies suggest that
countries could boost their GDP by between
five per cent and 20 per cent if women s par-
ticipation in the work force were on a par with
men s, but that captures only part of the lost
output. Even in rich areas of the world, where
women are close to half the paid work force,
they tend to work fewer hours than men and
in jobs with lower productivity, not to mention
lower pay as a result of pure discrimination.
If the gender gaps in participation, hours
worked and productivity were all bridged, the
world economy would be US$28.4 trillion rich-
er, or 26 per cent richer, McKinsey reckons.
The potential gains are proportionately greater
in places where fewer women are doing paid
work. India, for instance, could be 60 per cent
A more realistic target is for countries to
close their gender gaps at the rate achieved
by the country in their region with the best
recent record in this respect. That would add
US$12 trillion to global output by 2025, accord-
ing to McKinsey s calculations, other things
being equal; which almost certainly they will
The policies that would quicken a closing
of the gender gap at work, such as keeping
girls in school for longer and providing better
legal protections for women, are in the gift of
government. Women whose level of education
is on a par with men are more likely to find
well-paid jobs in technical professions.
They are also more likely to share unpaid
work more equitably with men---or, at least,
to be able to claim, as Rivers did---that the
dullest chores can wait for another six months.
@2015 The Economist Newspaper Ltd.
Distributed by the New York Times Syndi-
In the 1950s Caoyang New Village,
then on the outskirts of Shanghai,
became one of China s first model
settlements for heroic socialist work-
ers. Thousands moved into its plain,
lookalike homes to man its state-
owned textile mills. Today, rising from the
once-modest streets, is a gaudy building
intended for a new kind of model citizen:
Global Harbor ranks among the world s
biggest shopping malls, its floor space equiv-
alent to nearly 70 football fields. It blends
ersatz European architecture with a distinctly
Asian selection of stores. Beneath its vaulting
glass domes and mock-Renaissance murals
are a Hello Kitty cafe, a half-dozen noodle
restaurants, jewelry shops dripping with
gold and a theater used for karaoke con-
It is only a slight exaggeration to say that
China s economic hopes rest on the faux-
Corinthian columns of Global Harbor. With
the country s decades-old investment boom
fast dwindling, it needs consumption to
kick in as a new driver of growth.
This rebalancing has been talked about
for years, but has become more urgent as
China s industrial downturn has deepened.
The nationwide frenzy of construction is
abating, factories are saddled with overca-
pacity and the northern rustbelt is on the
brink of recession. This week a manufac-
turing index recorded its lowest monthly
reading in six years, and the seventh suc-
Amid the extreme pessimism about
China s economy in recent months, it is
tempting to conclude that rebalancing has
failed. Look at the car market, usually a
good shorthand for the health of consumer
demand: Automobile sales fell by 3.4 per
cent in August, compared with a year ago,
the third monthly decline in a row.
Other forms of consumption are accel-
erating, however. A real-estate recovery has
stoked demand for furniture, home elec-
tronics and renovation materials, with sales
rising an average of 17 per cent in August
from a year earlier. From jewelry to traditional
Chinese medicine, buying has picked up in
Smartphone sales are down in volume
terms but soaring by value, as shoppers
move upmarket. Companies hit by the anti-
corruption campaign under President Xi
Jinping are learning to prosper despite the
new strictures. Distillers profits, which fell
last year, have rebounded, pulled along by
affordable brands for ordinary consumers
rather than by the exorbitantly priced bottles
previously used as bribes for officials.
Overall, China s retail sales have increased
by 10.5 per cent in real terms this year, well
ahead of economic growth --- officially seven
per cent, but closer to six per cent according
to many analysts.
There are, as ever, doubts about the reli-
ability of China s data, though in this case
it may be that the retail figures are too low.
Nicholas Lardy, an expert on Chinese sta-
tistics at the Peterson Institute for Inter-
national Economics, a Washington-based
think tank, noted that retail numbers do
not include services, a glaring omission,
since surveys suggest that services account
for as much as two-fifths of China s con-
All this suggests that consumption is
picking up at least some of the slack from
the industrial downturn. The main reason
for the resilience of the Chinese shopper is
steady income growth. Wages for migrant
workers rose by 10 per cent in the second
quarter, compared with a year earlier, faster
than the national average of seven per cent.
Since low-income earners tend to spend
more of their pay than the rich, that has
given consumption an extra boost.
One concern is whether this income
growth can continue as Chinese industry
struggles. Some factories are cutting jobs.
Services account for a bigger share of the
economy than industry, though, employ
more people and are still growing well.
Structural factors also are at work. With
China s working-age population now shrink-
ing, labor is becoming scarcer and employees
command higher wages. China s house-
hold-savings rate of nearly 30 per cent,
among the world s highest, also is beginning
to fall as the population ages and the elderly
draw down some of their accumulated
wealth. Household consumption as a share
of GDP fell to 35.9 per cent in 2010, unusu-
ally low even by Asian standards, but since
then has been clawing its way up.
A generational shift has helped. For older
Chinese the experience of deprivation in
Mao s day inhibits spending. At Global Har-
bor on a Sunday afternoon, those carrying
shopping bags or lining up at restaurants
are overwhelmingly in their 20s and 30s.
"Our parents are very careful," legal assis-
tant Lulu Yu said, "but we want to have
more of a balance in life."
Even if Chinese consumption remains
healthy, though, it will not be a cure for
ailing global growth. The commodity-
exporting countries whose fortunes have
hinged on China for the past decade stand
mainly to lose, since they produce little in
the way of consumer goods that appeal to
Indeed, for the outside world as a whole,
China s shift from investment to consump-
tion will subtract from demand, since mak-
ing steel involves more imports than stocking
malls such as Global Harbor. The imported
component of Chinese consumption is 11
percentage points lower than that of its
investment, according to Goldman Sachs.
A rebalancing of US$157 billion from invest-
ment to consumption would thus cut Chi-
nese imports by about US$17 billion.
This relative self-reliance is likely to
increase with time. A study by Bain, a con-
sultancy, found that, out of 26 categories
of cheap consumer goods, foreign brands
lost market share in 18 last year, including
skin cream, milk, fabric softener and tooth-
paste. In more sophisticated products,
domestic companies also are elbowing into
territory once dominated by international
players. Chinese car brands have accounted
for 41 per cent of sales this year, a 3.5 per-
centage-point increase in market share.
Growing consumption of services, whether
cosmetic surgery or restaurant meals, only
accentuates the home advantage, since most
services are delivered locally.
China s consumer boom is real --- but do
not count on it to lift the global economy.
@2015 The Economist Newspaper Ltd.
Distributed by the New York Times Syn-
China's consumers can't save
the world economy alone
Women and work:
The power of parity
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