Why US is a consumer economy & China is an exporting economy
Primary reason for US being a consumer economy and China an exporting economy is the average weekly working hours. An average working American work for 40 hours a week i.e. 8 hours a day, 5 days a week whereas Chinese on the other hand for past 20 years has followed 996 policies, working for 72 hours a week i.e. 9 am to 9 pm, 6 days a week. Now what it has do with consumption which is the major driver of economy. Here is what one need to understand, when one have more time to spare you get involved in activities which could be entertainment, sports, dining, gym, travel and many more & that is what drive the economy. On the other hand Chinese with laborious working hours don't have the luxury of extra activities, as a result China economy was never a consumption driven though being second largest.
Total Deposit
China is a saving economy with total deposit of USD 40 trillion of which household saving is USD 20 trillion compared to US who has total deposit of USD 18 trillion which include household saving of USD 4.5 trillion. China is sitting on huge household saving which need a consumption push. Just to put in perspective India total deposit is USD 2.5 trillion with household saving of USD 170 billion.
What's Changing
China realization that its economy needs a consumption drive to achieve a GDP of 5% has already started working on labour reforms. Chinese government has initiated changes to working hours from 72 hours a week to 40 hours and 5 days a week also complying with European Union trade policy requirements. The change is happening on the ground which will act as a catalyst for future consumption behaviour. China is on the cusp on consumption boom which may not be immediate but definitely a step in right direction.
China future industry for investment
What drove US economy was it being the land of innovation and hence US is the leader & disruptor in digital economy. A glance on global digital ecosystem, if US is the leader than China is not far behind, remember the recent deepseek event. China is fast catching up in technology be it AI or semiconductor. No country is close enough to US & China when it comes to digital economy not even European Union or India.
One other perspective is the median age of US population is 38.5 and that of China is 40.1, both the nation has aging population so healthcare industry will be major beneficiary in both the country. China huge household saving and growing labour reform of freeing up time will lead to industry like digital entertainment, consumer discretionary gaining momentum. China leadership in developing cost effective AI and deep learning will lead to new product development. In a nutshell China provide a good base for investment in healthcare, Consumer discretionary, technology & digital entertainment along with travel industry.
Conclusion
Current retaliatory tariff war between US & China will not only put pressure on both the economics in terms of inflation and growth but US has more to lose here due to disruption in supply chain considering the fact US import USD 540 billion worth of goods from China. Its seems China is well positioned compared to US it's all about who blinks first.