Chinese Consumer Spending is Set to Double by 2030

Chinese consumer spending is set to more than double in 10 years, with an emphasis on services rather than goods, Morgan Stanley analysts predicted in a roughly 200page report released Wednesday. By 2030, Chinas private consumption is set to reach 12.7 trillion, about the same amount that American consumers currently spend, the report said. That figure is also up from Morgan Stanleys forecast three years ago of 9.7 trillion, and the 5.6 trillion Chinese consumers spent in 2019.

Spurring this expected growth are greater government emphasis on policies to support the domestic Chinese economy, increases in household income, further growth of urban areas, changes in technology and demographic shifts, the report said. The analysts predict disposable income per capita will likely double from 6,000 a year to 12,000 in 2030 as more people grow older and leave the work force.

Significantly, the Morgan Stanley analysts expect future Chinese spending will go into new categories of growth over the next 10 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, or about the current size of Australia, and those age 55 and above is set to increase by 123.9 million, or about the current population of Japan, the report said. The analysts added the size of other adult age categories will likely decline as a result of Chinas yearslong ban on having more than one child and an overall drop in…

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