Merrill Lynch asks the question: Is Asian consumption an opportunity or a mirage?

The bottom line, according to a recent Merrill Lynch report, is the supposed seismic shift in global consumption mostly benefits Asia itself.

As the China-driven recovery gains traction in Asia, there's quite a bit of hope for a shift in demand from the US consumer to the Chinese consumer and, consequently, Asia and emerging markets.

Merrill Lynch is optimistic that the baton will pass, and that a consumer upturn will eventually result in healthier, more balanced economies across Asia. However, the shift isn't likely to play out exactly how, or exactly when, many investors expect, the report says.

The key point is that a consumer boom, if it happens, would likely benefit growth -- and asset prices -- in Asia far more than anywhere else and there are a couple of things to keep in mind, according to Merrill Lynch.

First, China alone isn't big enough. In US dollar terms, household consumption in China ($1.6 trillion in 2008) is only 15% of US levels ($10.1 trillion). This is because China's economy is smaller than the US and its consumption share (35% of GDP) is only half the US (71% of GDP).

There would need to be a consumer upturn in the rest of Asia, as well as China, to amount to 38% of US consumption.

Second, the consumer cycle is in right direction, but investors are looking at the wrong story. The seismic shift is just that -- a change in the medium-term drivers of global growth. It's not supposed to be a short-term, cyclical call.

Third, consumption tends to fall on non-traded goods and services. Consumer goods account for only 12.5% of China's imports. In contrast, capital goods account for 23%, and commodities account for 31%.

Merrill Lynch notes that consumer spending in China -- the same as elsewhere -- tends to fall on domestically produced goods, services, and property. Compared to the investment boom of the past five years, a consumer boom in China would have a much smaller spillover impact on the rest of the world, and a much greater impact on China itself. In summary, the seismic shift, if it happens, would be good news for the world economy -- but above all, it would be great news for Asia.