In the US, the latest batch of data, released this week, showed retail sales climbed in December for the sixth straight month - though they missed expectations, with growth slowing to 0.3% MoM.
With the personal savings rate at a 10 year low, the US consumer is now fully tapped out: This latest uptick in spending has presumably been fueled by debt, as credit-card borrowing has reached an all-time high.
But another milestone in the history of global consumerism passed last month: As the Washington Post points out, China tied the US in 2018 in terms of domestic retail sales - according to data compiled by Mizuho.
In some important categories, China has overtaken the US: With 17.6 million vehicles sold in the US in 2016, for example, but that was far below the 24 million passenger cars sold in China. US automakers account for about one out of every five cars sold in China, even though the communist party placed a 10% tax on luxury cars and trucks imported from the United States.
This economic heft has made the problem of confronting China intractable: China is now responsible for 20% of sales for some of the largest US corporations. This is making it difficult for Trump to confront Xi Jinping.
Any restrictions on Chinese access to the US market would be met with barriers to American companies selling in China.
"China is one of the most important markets for many U.S. multinational companies,” Shen says. “This should lend China immense bargaining power."
One area where there's a lot of agreement across the political spectrum is to go after China's theft of US intellectual property. Over the summer, Trump ordered an investigation by the US Trade Representative Robert Lighthizer to examine China’s IP policies. That investigation is ongoing, and could lead the US to file a WTO dispute. Unilateral actions might include duties or import restrictions.
As the new year begins, it’s likely consumer spending in China will quickly surpass that in the US as more newly minted middle class Chinese discover consumer electronics, cars and fashion.