Chinese consumer spending is expected to grow by 7.9% a year to hit $12.7 trillion in the next ten years with services leading, according to CNBC. The projected spending is up from Morgan Stanley’s forecast of $9.7 trillion three years ago and more than $5.6 trillion Chinese consumers spent in 2019.
- Morgan Stanley projects disposable income per capita to double from $6,000 a year ago to $12,000 in 2030 as more people age and leave the workforce.
- The analysts peg Chinese consumer growth to government policies supporting the domestic economy and increase in household income.
- Chinese consumer growth is also expected to be supported by growth in urban areas, technology changes, and demographic shifts.
- Future Chinese spending is expected to shift to new growth categories over the next ten years as the age groups with the most purchasing power have families or retire.
- The 35 to 45 age category will likely increase by 25.3 million people, while those aged 55 and above is set to rise by 123.9 million.
- Morgan Stanley cites the initial shock of the pandemic, tightening of credit, and job losses due to increased automation and technological applications as factors that could slow growth.
- The government’s failure to improve social security plans is also a potential impediment to growth.
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