China has long been a major global power, however increasingly this national wealth is spilling over into a new affluent middle class.
These days the Chinese middle class is larger than the entire population of the USA, making them a force to be reckoned with. By many estimations China is the new world centre of consumerism as decades of Chairman Mao’s communist China give way to a modern society with the means – and the passion – for shopping.
The question is what the newly minted middle classes are going to be spending their wealth on. Certainly, technology is one growth area of the Chinese economy. Their native search engine Baidu is seen as a very real competitor for Google for example. This year also saw China become the world’s biggest consumer of cell phones, finally overtaking the USA.
But it’s not all electronics. Increasingly Chinese citizens are expecting everything that their American or European cousins do from daily life. For example luxury goods are proliferating in the commercial hubs of China, with major global brands like Versace and Gucci setting up boutique stores in larger cities. Health clubs, saunas and spas are also becoming increasingly popular as society has the time and money to focus on their appearance.
However what is perhaps more interesting is what the Chinese middle classes can’t buy. You see, while communism may be slowly giving way to consumerism, there are still some surprisingly ‘old fashioned’ feeling rules in operation for Chinese citizens. One of these aims to cut down on China’s considerable pollution problems by limiting car ownership. At present eight cities have introduced measures limiting car purchases and this is likely to grow to other congested areas in the future.
In addition, in an attempt to keep property prices as reasonable as possible there have been serious limits put on the Chinese ability to buy second holiday homes. The measures seem to have worked as the turbulent Chinese property market has begun to cool, even showing some minor contraction in some cities.
The real question is what this vast population will do with their disposable income when new cars and houses are off limits? After all, as one expert commented, one can only buy so many TVs and cell phones. The answer, it seems, is travel, which is expecting a huge rate of growth over the coming years.
Whilst the Chinese middle classes already travel far more than their parent’s generation, much of this is actually within China and its closest neighbours. Now, it seems, Chinese travel is expected to go global. With such a large population this could have a significant impact on the global travel industry and it will be exciting to see how hotels, airlines and more change over the coming months in response to Chinese desires.