The middle class in China (referring to people whose annual income is between 7,500 – 25,000 US dollars) might expand quickly from 35 million in 2006 to 100 million ten years from now, according to a recent report jointly released by HSBC and Fudan University, the China Business News reported.
The fast expansion of the middle class is boosted by the rapid growing economy, which has continued in China for nearly 30 years since the reform and opening-up, the stable social environment and the climbing figure of their incomes.
In the survey, it is found that middle class women, generally with a good educational background, have gained professional work experience, their consumption desire is the strongest. They don't care about prices, rather they attach more importance to product quality. They dine at a good restaurant at least three times in a week and 85% of them have the temptation to buy luxury goods. Over half of the women in this group plan to buy a house within two years and many already start to travel abroad.
At the same time, the financial institutions are surprised to find that in China, the middle class people generally do not trust financial consultants and fund managers in managing their money assets. At present, most middle class people still prefer to use their money to buy houses or simply save it in banks.
In light of this, many large foreign financial institutions, including Citibank, HSBC, and Standard Chartered Bank, have started to devote more efforts to private bank services. They send their mainland staff workers to go to Hong Kong to receive training and hope that once they come back, these people can help open the market in private bank services in the mainland.
At present, the middle class in China can contribute little to the Chinese economy. What they can do most is to lead the consumption mode in the country. It might take at least three to five years before they can expand into a relatively large group in society and it might take another twenty years before they can finally become the main consumption group in society, said Lu Xiongwen, a professor at the School of Administration at the Shanghai-based Fudan University.
(Chinanews, December 7, 2007)
