A growing middle class is slated to become a third of China’s population by 2030, according to a report released on Wednesday.
This class of consumers is poised to spend as much as the level currently seen in the European Union, South Korea and that of the United States back in 2000.
The report, released by The Economist Intelligence Unit, categorized mainland consumers into four types based on annual disposable income: low income (less than 13,000 yuan or $1,888), lower-middle income (13,000-67,000 yuan or $1,888-$9,729), upper-middle income (67,000-200,000 yuan or $9,729-$29,043) and high income (above 200,000 yuan or $29,043).
As it found, about 35% of China’s population will have in excess of $10,000 of annual disposable income by 2030, South China Morning Post noted. This is roughly 10% above the current figure.
In addition, private consumption is expected to grow by 5.5% on average each year.
Yet wealth inequality is bound to stay. The EIU analyst Dan Wang said:
“Compared to the US and South Korea, China has a much bigger percentage of low-wealth population, mostly because of the large rural population. China’s inequality in wealth is generally considered lower than that in the US and South Korea, but it is likely to be higher in the future.”
Interestingly, Wang added how wealth will be determined:
“As development deepens, wealth will depend more on capital rather than labor. People owning more capital to start with will be able to accumulate wealth [like housing] a lot faster.”
That being said, more people in China will likely do business soon.