#174: The Rise of the China Middle Class

One of the most significant recent developments in the structure of the global population is the rise in the China middle class.

Source: https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/China/The%20value%20of%20emerging%20middle%20class%20in%20China/The-value-of-Chinas-emerging-middle-class.pdf

Starting in 1985 the poor class accounted for 95.2% of the urban disposable income, with 2.6% ending in 2025. Meanwhile, the middle class rose from 1.2% in 1985 to 51.1% estimated in 2025. The largest increase took place in the decade from 2015 to 2025, more than doubling from 21.2% of urban households to 59.4% of urban households.

The total population of Chinese consumers will accounts for about 850 million additional consumers or 59.4% of 1,428,477 people. This can be compared with less than 350,000 middle class in North America, or less than 25%.

https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf

Forecast:

The enormous forecast increase in the China middle class by 2025 will create a new consumer market on an unprecedented scale. With highly automated factories already in China the purchasing capacity of a rising  middle class will tilt the ranking of the China economy in their favor as compared to the USA. Unless the political conditions will keep  the international market open the inability of the USA to share in the China growth of consumption will damage the USA economy.