China's rural middle class will boost consumption

Subject

Household consumption in China.

Significance

China is the world's second-largest consumer market. The country's middle class possesses significant discretionary spending power and rising incomes have given access to a much more varied shopping basket than ever before, generating profound adjustments in the pattern of consumer demand.

Impacts

• The rural market will be an increasingly important source of consumer demand, even amid accelerated urbanisation.
• As a rural middle class emerges, rural consumer spending will surge and will also become more sophisticated.
• Consumption will grow fastest in the services sector.
• New ways of paying for consumption spending will enable rapid growth of the financial services sector.
• New geographical drivers of consumption will emerge as lower-tier cities account for more and more of China’s affluent consumers.