China is trying to grow quickly in areas where they have little expertise, like developing their own pharmaceutical industry. This has led Chinese consumers to reorient and start spending in meaningful ways in areas where they have not traditionally spent, such as cosmetics and skincare. New business models are being developed around the cloud and e-commerce.
If the trade war gets fiercer, China will do further stimulus, without any doubt. They also will most likely devalue their currency, which could be a little bit ugly for the rest of the world.
Thus, as go prospects for Chinese consumers, so too go the prospects for investors in Chinese consumer equities.
Elisa Mazen is a portfolio manager at ClearBridge Investments, a subsidiary of Legg Mason.