As global companies entered China, many focused mainly on serving China’s
urban affluent consumers. However, if they continue this strategy of simply
skimming the cream from the top, they risk missing the real opportunity – the
emerging middle class.
During
the next 20 years, a huge middle class with enormous spending power will emerge
in China’s cities. As incomes increase, the spending patterns of this group of
consumers will evolve, fueling various levels of growth across consumption
categories.
Though the potential benefits are enormous, serving this middle class has
unique challenges and companies will need to think creatively to succeed.
If you've got it, spend it: Unleashing the Chinese consumer By pursuing a more aggressive program of comprehensive reform, China's leaders could raise private consumption above 50 percent of GDP by 2025, bringing the consumption rate in line with other Asian countries and vaulting China's economy into a new phase. A more consumer-centric economy would generate more jobs, allocate capital and resources more efficiently, spread the benefits of growth more equitably, and also enrich the global economy with $1.9 trillion a year in net new consumption. Read more
Preparing for China's urban billion By pursuing a more concentrated urbanization path guided by action to boost urban productivity, China’s local and national policy leaders would minimize the pressures and maximize the economic benefits of urban expansion. A two-part report details the scale, pace, and global implications of urbanization at the sector and city levels. Read more
Putting China's capital to work: The value of financial system reform A more integrated approach to reforms could reduce the inefficiencies in China’s financial system and bring about big gains for the economy. Read more
Perspective—Addressing China's looming talent shortage Despite China's apparently vast labor supply, multinational companies are finding few graduates have the necessary skills for service occupations. This looming shortage of home-grown talent has serious implications for the multinationals now in China and for the growing number of Chinese companies with global ambitions. Read more
