BIZCHINA / Biz Life
Middle class is burgeoning
(Chinanews.cn)
Updated: 2006-07-12 10:38
A recent survey conducted by the MacKinsey & Company global consulting
firm showed that a large, complicated consumer group is taking shape in
China. Considered as the middle class group in large cities, their
consumption power will redefine China's consumption market.
China's growing economy has enabled millions of Chinese families to shake
off poverty. At present, 77% of Chinese families have made an income less
than 25,000 yuan a year. By 2025, however, MacKinsey predicts that only
10% of Chinese families will make an income even below this figure. By
then, urban Chinese families will be able to consume 20 trillion yuan a
year, making China one of the largest consumption markets in the world.
As the economy continues to grow, MacKinsey predicts that China's middle
class group will experience two developmental stages. Consumption groups
whose income levels have a clear-cut distinction between them will emerge
and disappear in certain periods. In 2010, a large number of lower
middle-class people will emerge in China, whose annual family income will
be between 25,000-40,000 yuan. In 2020, a higher middle-class group will
spring up, whose annual family income will range between 40,000-100,000
yuan.
According to MacKinsey's estimation model, by 2011, China will have 290
million lower middle-class people, forming the largest urban social group
by that time, and accounting for 44% of the urban population. The growth
of this group will reach its peak in 2015 when its consumption power will
reach 4.8 trillion yuan. The second change will occur ten years later
when about tens of millions of people will become upper middle-class
people. There will be 520 million such people by then, comprising over
half of the urban population, whose total dispensable income will reach
13.3 trillion yuan.
(For more biz stories, please visit Industry Updates)
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