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A recent Business Week article suggested that it is time to focus more on the Indian middle class than on the Chinese middle class consumer. India has about 300 million in the middle class today versus 200-300 million middle class Chinese, depending on your information source. Business Week postures that India’s middle class will be better consumers than their Chinese counterparts.

http://www.businessweek.com/magazine/content/10_05/b4165084462859.htm

The Beijing Municipal Development and Reform Commission announced in September 2009 that the gross domestic product (GDP) per capita in Beijing in 2008 was $9,075 and is likely to reach $10,000 by the end of 2009. (Stratfor)

AdAgeChina recently stated that over the next 15 years, China’s so-called gray market of consumers aged 50 plus will become the most potent spending demographic on the planet. By 2025, there will be more than 500 million “mature” Chinese consumers, or almost 36% of the Chinese population. Today, the country has 300 million Chinese over age 50, making up 21% of the population.

There would seem to be sufficient middle class for foreign companies to target in both countries currently, while many fully developed countries have consumers who are reluctant to spend.

The International Energy Agency* projects that the global demand for oil will rise 23% from 85 million barrels a day in 2008 to about 106 million barrels a day in 2030.

Oil demand by developing countries is projected to rise 62% to about 56 million barrels a day by 2030.

In the developed world, however, oil demand is expected to decline – yes, decline – by 10% to about 40 million barrels a day.

This shift from the majority of today’s main oil need  going from developed countries to energy hungary developing countries is likely to have profound implications for the world trade balance.

And may result in potentially game changing political alliances as the developed world concentrates on other energy sources while the developing world seeks more and more oil.

Where will this oil come from? Will the same sources be providing energy as today?

Of course, this is very hard to predict. Recent projections that oil supply is about to peak globally are being proven wrong by immense deep water finds off the northwest coast of Brazil and in the supposedly fully explored US Gulf of Mexico. And much of the western coast of Africa remains unexplored based on current geophysical exploration technology.

And then there is the US gas component. Recent major discoveries in long explored areas of the US may result in a long term electric power generation solution through clean burning indigenous gas without expensive liquid imports that were thought necessary just a couple years ago. Perhaps the US’ energy ‘crisis’ once again will be solved by local, new sources of oil and gas – albeit at a price.

Meanwhile governments have gotten into the energy exploration business. The Chinese character for crisis also means opportunity. Government controlled Chinese companies are tying up major oil fields and exploration areas directly with other governments, essentially eliminating private oil and gas exploration companies.

And what does the projected 62% increase in oil demand for the developing world mean for all of us on this small blue planet???

* As reported in the November 10, 2009 edition of  ’The Economist’ magazine.

The February 14, 2009 edition of ‘The Economist’ magazine had a special section on the world’s middle class.

If one defines the Middle Class as people with one third of their income left for discretionary spending after providing for basic food and shelter, new research -defined in detail in ‘The Economist’ – indicates that as of 2005 there were 2.6 billion people in the Middle Class – about 55% of the world’s population.

This has immense implications for companies selling their products and services on a global basis. And for the future development of the world, for that matter.

As people emerge into the Middle Class, they do not merely create a new market. They think and behave differently. They are more open-minded.

This aspirational, new to Middle Class population is more likely to invest in new products, new technologies and new businesses than the already rich, who tend to try to defend their existing assets.

This new Middle Class are now concerned about quality, brand and convenience for their discretionary spending. They often show they have ‘made it’ by frequenting western branded businesses, which are seen to have better quality and be more convenient than local brands.

And the newly Middle Class like to show off by being seen at western brands. How else can one explain almost 30 Starbuck’s in the Greater Shanghai Area with western prices and often busier than in the U.S.?

This changes countries and offer immense future opportunity for western brands on a global basis.

China started applying its economic stimulus last November while the US was thinking about when the US Congress might act. And now we are starting to see articles in international publications such as ‘The Economist’, ‘Financial Times’ and the ‘Wall Street Journal’ that there is evidence the China stimulus is working on internal consumer and business spending.

Last Saturday’s ‘Wall Street Journal’ had a front page article on this subject.

http://online.wsj.com/article/SB123934751932407099.html

Chinese demand for crude oil hit a one-year high in March. Steel mills imported record quantities of iron ore in March. Cars sales hit a monthly high.

Articles in today’s ‘Wall Street Journal’ highlight upbeat news on the China property market and stock market.

Some of the biggest international retailers are going ahead with ambitious expansion plans in China in 2009.

Companies like Tesco PLC, Carrefour and Wal-Mart Stores Inc. continue to see the Chinese consumer as a good long-term bet.

Walmart http://online.wsj.com/article/SB123258172515304267.html

Yum http://online.wsj.com/article/SB122896373927096997.html