Lift the hood on China's economy and you'll find low-end manufacturers churning cheap exports bound for global store shelves. The state-owned industrial sector has undergone major consolidation. And China is no longer a low-cost country, as labor costs edge higher.
While the world's second-largest economy has shaken global stock markets in the new year, the investing thesis for China — the promise of nearly 1.4 billion people, driving sales and profits for consumer-facing companies — remains intact. Certainly the growth engine is weaker, as China on Tuesday reported its slowest expansion since the financial crisis in 2009.
But for the full 2015, China grew at 6.9 percent. And China's middle class is only expanding and growing in sophistication. In other words, more Chinese households are not only buying an appliance or beauty product, they're wealthy enough to be discerning about different brands and preferences — a hallmark of the newly wealthy, climbing up a few notches into the upper middle class.
"It's easy to connect the dots and say, 'This is a collapse in the overall Chinese economy and consumption,' " said China expert Jeff Walters. "It's not."