Yaorusheng/Getty Images

Why China’s Cities Will Drive Global Growth

Now that China’s investment-led boom has run its course, continued economic growth – in China and globally – will depend on urban Chinese consumers. By 2030, China will account for 12 cents of every $1 of worldwide urban consumption.

SHANGHAI – For 15 years, China has been a key engine of global growth. But now that China’s investment-led boom has run its course, continued economic growth – in China and globally – will depend on urban Chinese consumers. By 2030, people living in cities will drive 91% of global growth in consumption, and China is emphasizing both urbanization and a consumer-led growth model.

The McKinsey Global Institute’s latest research is optimistic that China’s strategy will succeed. MGI (where one of us is a partner) foresees continued growth in the number and income of urban consumers, and predicts that 700 Chinese cities will generate $7 trillion, or 30%, of global urban consumption growth between now and 2030.

Today, China’s urban working-age consumers number 521 million; in just 15 years, their ranks will have swollen to 628 million. Beijing, Guangzhou, Shanghai, and Shenzhen will each add more than one million households with annual income above $70,000 – the number of Hong Kong households in that income bracket today. Per capita spending is set to jump from $4,800 to $10,700 by 2030, at which point this group will spend 12 cents of every $1 of urban consumption worldwide.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

required

Log in

http://prosyn.org/dXOjDOz;