Interesting economic milestones will be achieved before China catches the US on per capita income.
* Since China has over 4 times the US population, when the top 20% of China’s population have more than twice as much per capita income as some at the 50 percentile level. Therefore before China gets to half the per capita income of the USA China will have a population subset which matches the US in numbers and income.
* China will dominate the luxury goods and tourism markets in raw numbers
* If China’s yuan appreciates by double versus the US dollar over 2018-2027 then China would move from one quarter the US per capita income in 2018 to one half US per capita income even if GDP growth levels were equal. Such a move would mean that China would have the GDP of a combined United States and European Union.
Reports that call for China to become the world’s largest luxury market by 2020 are far from new. A 2012 report by McKinsey explained that China had become a leading luxury market by 2010 and could become a dominant force by 2020.
According to the report:
Affluent consumers will remain an elite minority, making up only 6 percent of the population in 2020. (In the United States in 2010, more than half of the population earned at least $34,000.) But that 6 percent will translate into about 21 million affluent households, with 60 million consumers.
McKinsey further estimated that more than 75% of China’s urban population will earn between 60,000 yuan and 229,000 yuan, or roughly $9,800 to $37,000, each year by 2022. If the yuan appreciated by 20% over the eight years then it would be US$11,700 to $44,400.
China’s urbanization plan anticipates that by 2020 urban residents will make up 60 per cent of the total population, compared to 53.7 per cent in 2013 — while urban permanent residents will comprise 45 per cent, compared to 36 per cent in 2013. China will have about 900 million in the cities by 2020. So 775 million will be in the 60,000 to 229,000 yuan income range. 60 million will be above that range.
200 million Chinese tourists will travel overseas in 2020, with numbers still growing in the 2020s
By 2020, the number of individual Chinese going overseas each year will have doubled to 200 million from last year, brokerage CLSA estimates. China Tourism Agency said there were 98 million trips taken overseas last year, up 18 per cent on 2012.
And China is just one country among many boasting a fast-growing middle class eager to travel.
By 2030, there will be 1.8 billion people travelling internationally, the World Travel and Tourism Council says. Just last year, one billion people crossed an international borders.
Although per capita income will not match the United States, the top 320 million in China will be at current US levels by about 2030
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.