China’s middle class is growing, and growing big. Almost all demographic estimates point to a startling statistic: by 2030, the size of China’s middle class will be more than 700 million, the largest in the world. It is believed that currently 25% of the overall population is middle class while in urban areas the number goes up to nearly 40%.
As more people move up the income ladder, consumer spending will only increase. As we know, it is the nouveau riche class which is aspirational and has a consumerist bent of mind. In other words, higher disposable income (greater purchasing power) will only make for greater discretionary spending, which means big bucks for global brands.
Ever since the Chinese government opened the economy in 1977, economic development has more or less been concentrated in the eastern parts of the country, especially along the east coast. As manufacturing boomed, it attracted migrant workers from the less-developed western areas and the large hinterland. The consistently high economic growth rates over the last three decades brought wealth and riches to the urban classes, thus raising the economic status of hundreds of millions of Chinese.
However, the middle class demographic pattern of concentration is changing. The infographic (below) from the Reuters blog shows the shifting demographic patterns of the Chinese middle class. As the text on the graphic says, “today, China’s middle class urban households are mostly concentrated along the eastern seaboard. By 2020, following the rapid growth of cities in the interior, they will be spread throughout much of China. Today’s graphic shows middle and affluent urban households as a percentage of total urban households in 2012 and projections for 2020.”