According to a new study by The Economist Intelligence Unit (EIU) entitled “Chinese Consumer in 2030” (paywall) released this week, 35 percent of China’s population is predicted to be “upper-middle class” or above by 2030, reports Jing Daily. EIU's summary introducing the report states, "The traditional drivers of China’s economy, investment and exports, are struggling, but the country’s consumers keep spending. Private consumption is now the main driver of economic growth in China, and EIU expects it will grow in real terms by 5.5% a year on average in 2016-30 – boosting its share of the overall economy to nearly 50%. Income distribution is set to change radically over the next 15 years, as more consumers move into the middle-class income bracket." Namely, the EIU finds that by 2030, lower-tier cities like Foshan, Wenzhou, or Changsha will have more “high-income” consumers than Beijing has now.
According to the study, 35 percent of China’s population is predicted to be “upper-middle class” or above by 2030. This will amount to about 480 million people, marking a massive increase from the current estimate of 132 million upper-middle class people in China (10% of the population). The Economist defines a concept of “upper-middle class” as anyone with disposable income of at least US$10,000. Meanwhile, luxury retailers will be especially interested in tracking the growth of “high-income” earners, which it categorizes as those with RMB200,000 (almost US$30,000) in disposable income—a group that will surpass 10 million people in Shanghai by 2030 (up from around 4 million now). "But," writes Jing Daily, "it’s not just the staggering Tier 1 city growth in high-income consumers that is especially of interest to luxury brands - it’s also their populations’ rapid expansion in smaller cities across China ... a staggering number of smaller cities will also have passed up where the top tier is at now, which is set to have a dramatic impact on the ways retailers target consumers in these cities."