DAVOS, SWITZERLAND: CHINESE and Indian consumers appear to be bucking the global trend and going on a spending binge, but they cannot make up for the billions not being spent by American shoppers, experts said at the World Economic Forum.

India's Trade Minister, Mr Kamal Nath, projected that domestic consumption in his country is expected to grow by around 7 per cent this year.

Chinese Premier Wen Jiabao said that among China's early signs of recovery is a 20 per cent rise in domestic consumption at the start of the Chinese New Year, compared to that of the same period last year.

'The signs are small but they give me hope,' he said. Bank of China vice-president Zhu Min forecast that Chinese domestic consumption will grow 20 per cent this year, the same pace as last year. But he noted that American consumer spending is set to plunge 10 per cent, or US$1 trillion (S$1.5 trillion), as consumers are hit by falling home values and a credit drought.

If United States consumers spend US$1 trillion less annually, even a boost in Chinese and Indian domestic consumption is unlikely to fill the gap. And growth through 'domestic consumption has to be the only way', said India's Mr Nath.

Professor Ken Rosen at the University of California at Berkeley slammed the American model of excessive borrowing to drive spending and growth. He added that rebalancing the US economy would be 'very painful' but that it 'is the right thing to do'.

But Mr Zhu warned that getting China's population to make a substantial change to its spending habits would take time.

'China is trying to increase consumption, but don't overly count on China to increase consumption to save the world.' - AGENCE FRANCE-PRESSE