Chinese Consumer Spending to Double by 2030 to $12 Trillion

Chinese Consumer Spending Expected to Double by 2030

Financial researchers have said they expect Chinese consumer spending is set to double by 2030, as the middle class continues to expand in the Middle Kingdom. 

The analysis comes from Morgan Stanley, a major financial institution who says that it expects China’s consumer spending to double to more than $12.7 trillion by the end of the decade. 

The report says that the majority of this increase in consumer spending will be directed toward services, rather than purchasing new goods. 

Last year, Chinese citizens purchased more than $5.6 trillion worth of goods and services. 


This is expected to grow to more than $12.7 trillion, after Morgan Stanley revised its first estimate of $9.7 trillion that it estimated around three years ago. 

According to the report, the primary drivers of this radical increase in consumer spending are changes in technology, a widening and more affluence Chinese middle class, increases in household incomes, demographic shifts and domestic policies in China that prioritise its own economy. 

Furthermore, Morgan Stanley’s analysts expect that the average income per capita will double from $6,000 a year to more than $12,000 a year by 2030. 

Private consumption in China is expected to increase by around 7.9% every year leading up to the turn of the decade, marking “one of the highest levels in the world” of private consumption. 

Authors of the report say that “material shifts in consumption patterns are likely to take place, from young consumer focused to household demand driven, which will incrementally require a higher proportion of services in consumption.” 

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Major demographic shifts are set to take place in China, with the 35-45-year-old age bracket set to increase by more than 25 million. Those aged above 55-years-old will increase by 123.9 million; the equivalent population of Japan. 

“We think the average Chinese consumer will be a driver of change rather than merely a recipient of Western consumption trends,” reads the report. “Part of that change will be informed by certain cultural values and consumption needs to support those values. These include strong family ties and the prioritisation of education,” it said. 

China’s economy was impacted by the COVID-19 pandemic, but was able to recover relatively quickly, with the Chinese GDP growing by 2.3%. 

Retail sales, however, were impacted after sales contracted more than 3.9% for the year. Month-by-month sales figures returned to normal sales volumes by August, with December marking a 4.6% growth in retail sales compared to 2019 figures. 

According to a report from CNBC, Chinese authorities could “aggressively tighten the availability of credit for consumers. Chinese might also be inclined to save more if increased automation and other technological applications result in larger-than-expected job losses, or if the government isn’t able to significantly improve social security plans to help cover large personal costs.” 

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