As China looks to shift its export-dependent economy to a greater reliance on domestic consumption, one number is in its favor: 280 million.
That’s the total number of affluent consumers China is expected to have by 2020 – more than doubling the current total of 120 million — according to a new study by consultancy Boston Consulting Group.
BCG describes as affluent people with annual household disposable incomes of between $20,000 and $1 million.
The upper affluent — those earning between $40,000 and $1 million per year — will account for 40% of the 280 million, the BCG study said. (BCG puts people whose families have disposal incomes over $1 million per year in a separate category, high net-worth individuals.)
China has been trying for years to get its people to spend more, in part to wean the world’s No. 2 economy off export-led growth at a time of falling consumption abroad. But regular Chinese workers, unsettled by the country’s meager health care and pension systems, remain reluctant to part with their money. That leaves the wealthy as the best hope for gains in domestic consumer spending in the short- and medium term.
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