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The rise and rise of China’s middle class

The rise and rise of China’s middle class article image

China, the world’s second largest economy, now boasts 1.1 million millionaires.

But the country’s number of wealthy individuals below the seven-figure benchmark is where the truly massive growth is located.  

According to a new Forbes study, the country’s “mass affluent,” or “upper-middle class” demographic, is rising at a growth rate that far exceeds that of traditional dollar millionaires and is tipped to reach more than 14 million people by the end of this year.  

The Forbes study, White Paper on Chinese Mass Affluent Wealth for 2014, categorizes China’s “mass affluent” as individuals with investable assets in the range of RMB600,000 to 6 million (A$100,000 to $1 million).  

This group is estimated at 11.97 million of China’s total population – and the number is expected to rocket by more than 2 million by the end of the year.  

If it does hit 14 million as predicted, this will be double the total number of China’s millionaires.  

To gain more details on the demographics and desires of this upwardly mobile middle-class group, Forbes conducted a survey in China’s key geographic areas of economic growth. This includes the Yangtze River Delta, the Pearl River Delta, Beijing, and Tianjin.  

Well-educated  

With assets in the form of cash, deposits, stocks, funds, bonds, insurance, wealth management products, real estate, and other holdings, this group is fairly young.  

Sixty percent of its members are aged between 30 and 50 years.  

They’re also (mostly) well educated: 53.8 percent have a bachelor’s degree, while 10 percent have a master’s.  

Many are clearly saving their money and investing to get rich: for annual incomes, 51.9 percent earn RMB100,000 to 500,000 (A$18,000 - $A87,000), while 21.2 percent earn RMB500,000 to 1 million (A$87,000 - $A$174,000).  

About 51 percent work for a privately run company, while 25 percent work for a state-run enterprise. The remainder work in other sectors.  

Wealth is important  

Delving deeper into the mind of mass affluent Chinese individuals, Forbes found that money doesn’t necessarily buy happiness for them.  

While they’re not overly discontent – 45.1 percent said they felt “happy” while only 1.7 percent said they were “unhappy.”  

Family and health were the two most important factors listed for happiness.  

Wealth is still important though: it came in third place, ahead of business, living quality, and social circle, respectively. They’re also working hard to gain and/or keep this wealth: 74.7 said they feel stressed.  

With a comfortable income and aspirational, upwardly mobile mindset, this demographic group are avid consumers.

They are brand conscious and are willing to pay a premium for quality goods.  

And Australian exporters are perfectly placed to take advantage of this booming market. 

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