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From High-End to Thrifty: What Changes in Fashion Mean for China's and Japan's Economies

By Nathaniel Williams
Wed, 21 Jul 2010 14:45:00 ET
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Only a small portion of the East China Sea separates China from Japan, but the two nations' cultures couldn't be more different. One of Elliott Wave International's Asian analysts recently experienced the cultural differences firsthand.
Asian-Pacific Financial Forecast Editor Mark Galasiewski (gala-shev-ski) used to live in East Asia during the 1990s, so when he gave two speeches in Hong Kong and Tokyo recently, he took time to travel and visit old friends. He couldn't help but notice how much women's fashion had changed in the 15 years since he had lived and traveled in East Asia.
In China, the latest styles are now in vogue, and many women purchase high-end fashion by Louis Vuitton or Gucci. An increased sense of style has even influenced the wardrobe of the Chinese militia women, who wore rose-colored, above-the-knee skirts in China's National Day Parade last year.
In Japan, the portrait is starkly different. Read how Mark describes it in his "East Asian Travel Logs:"
"Rather than buying new clothes from ritzy department stores, the new hip is thrift. My friend's wife informed us that the most popular shops are now high-quality, low-cost fashion chains, like Forever 21, H&M, and Japan-based Uniqlo.... In March, management consultant McKinsey & Co. concluded that Japanese consumers have undergone a 'fundamental shift' in their behavior away from conspicuous consumption and in favor of bargain-hunting."
Cultural changes in fashion, pop culture and music speak volumes about the overall trend of an economy -- and where that trend might be headed next. That's what socionomics, the new science of social prediction, tells us. Mark's "East Asian Travel Logs" gives you a perfect example of how cultural trends and economic and financial forecasting intertwine.
"Fear made the Japanese rich after the Pacific War at the beginning of the Kondratieff cycle and the bull market. Complacency drove them to over-consume in the 1980s and has since shackled them with debt. Now, toward the end of the bear market and Kondratieff cycle, Japan's mood is again turning increasingly conservative, with social behaviors reflecting that shift."
To read more about the future of China's and Japan's economies, get Mark's FREE report, "The East Asian Travel Logs: Insights into the Markets and Culture of China and Japan." Click here to learn more about your free report >>

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