The consumption power of Chinese blue-collar workers is underestimated, and they will generate greater domestic consumption despite the current trade disputes, according to Shaun Rein, founder & managing director of China Market Research Group.

Rein has been in China for 21 years and has written three books on Chinese market and consumers. He said an obvious trend in China currently is that people are underestimating the optimism of blue collar workers. 

"Three years ago, a lot of young men, maybe between 20-22 years old, were making 1500-2000 yuan a month, working in factories in south China's Guangdong Province, or working in real estate. But because of the rise of e-commerce companies like Meitu, Taobao, these people are making 10,000 yuan a month." 

"There are about 10 million jobs in China today. So the optimism of blue-collar workers is really high despite the trade war," Rein explained.

Another trend sweeping through China is the rise of Chinese domestic brands. 

"We started to see that Chinese consumers want to buy Chinese products made by Chinese, [and] for Chinese. In 2011, we interviewed 5000 consumers in 15 cities. At that time, 85 percent of consumers said they only trusted foreign brands." 

"However, 60 percent of consumers said they always choose a domestic Chinese brand over foreign brand in a similar survey done in 2016."

While there are lots of concerns that Trump is not trying to extract better trade concessions, but looking to contain China's growth, Rein is worried that more anti-America sentiment by Chinese consumers will be seen over the next three to six months if the trade frictions continue.

As to multinationals doing businesses in China, Rein advised them to localize productions, not only building local factories, but also designing products especially for Chinese consumers. "It's tough. But there are things the multinationals need to do," said Rein. 

He stated that the first thing is to hire top Chinese talents to help the design process, which is "absolutely the key going forward."

Meanwhile, he mentioned that multinationals should make decisions quickly. "You should empower the China CEO, who has credibility in the headquarters, [to] make the decision fast."