Global consulting firm Deloitte has some soothing news for those worried about the economic fallout in Asia from possible trade war- young spenders in India and China will continue to fuel growth in the region.
These consumers are "inherently optimistic and incredibly open to innovation...enthusiastic importers as well as formidably competitive exporters," according to a Deloitte January report titled "Voice of Asia."
President-elect Donald Trump has repeatedly singled out China as a target for tough talks on trade, saying the Middle Kingdom artificially weakens its currency for export advantages and is not as open as it should be to U.S. goods. China, the second largest holder of U.S. debt, has fired back that its trade policies follow global rules. In the case of India, the country manufactures a large share of generic drugs that reach U.S. shores, another target for Trump as he seeks on-shoring of jobs linked to products sold widely in the U.S.
In both countries however, spending pattern changes are seeing a sharp switch from frugality by many households to wider use of credit and lifestyle purchase linked to rising incomes, a Deloitte report said.
"We are seeing a transition of the growing middle class in very large economies such as China and India, where consumers are coming to the fore," Ric Simes, economist at Deloitte and one of the authors of the report, told CNBC.
In China, where economic growth has slowed to its lowest pace in over 26 years, policymakers recognize that investment spending led by state-owned enterprises is not sustainable, so consumer spending has to take over as the main growth driver, according to the report.