HSBC economists estimated in a report on Friday that the number of multimillionaires in China will more than double over the next five years, and the size of the middle class will increase by nearly half, thus stimulating consumption in the economy.
The bank estimates that the number of high net worth individuals (with at least 10 million yuan in investable assets) in China could rise from more than 2 million today to 5 million.
The number of the middle class will grow by more than 45 per cent, from about 340 million today to more than 500m.
A team led by qu Hongbin, chief economist for Greater China, wrote in the report: "A growing middle class will support economic growth in the medium to long term, while stronger consumer spending will boost domestic demand, business confidence and capital spending. The rise of the middle class will also increase imports of goods and services and attract foreign companies to invest in China. "
These economists say growing wealth will help China avoid falling into a "middle-income trap" and help the government try to make the economy more consumption-oriented. They said: "it is no exaggeration to say that the middle class can become a Chinese double."The pillar of the circular strategy. "
HSBC estimates that Chinese household wealth is likely to grow by about 8.5 per cent a year over the next five years, and investable assets will reach 300 trillion yuan in 2025, equivalent to about 300 per cent of (GDP) in 2020.
A larger middle class with higher incomes means a rising demand for quality goods and services. HSBC estimates that for every $20 increase in daily spending by China's new middle class, total consumption in China will increase by about $1.1 trillion a year.