Rapidly growing middle class in China

The proportion of the low-income population of China is shrinking. According to the Economic Intelligence Unit (EIU), China is set to become a middle-class society by 2030.

As it stands, roughly 40 percent of the population still falls within the low-income bracket, which means having a disposable income of no more than $2,100.

This number is expected to drop to 11 percent by 2030, with people moving into a lower middle-income status. This is where people have between $2,100 and $10,800 of disposable income per year.

One of the key reasons for this massive rise of the middle-class is due to the current 18-35-year-old generation. Unlike the previous generation, who were relatively frugal and modest, this newer generation is for more open to spending money, especially when it comes to purchasing consumer goods and healthcare.

For example, in the past, China’s main consumption centered around essentials such as: food, beverages and clothing. With average disposable income on the rise, the new generation is far happier to spend money on luxury goods as well as healthcare.

Whilst this shift to a larger middle class won’t be easy, and will certainly lead to some failures, a developed middle class is essential to the economic stability of any developed country; allowing for increased taxation and higher standards of living.

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