Chi­nese mid­dle class now world’s largest

Enterprise - - International News -

China’s mid­dle class has over­taken the United States to be­come the world’s largest, Credit Suisse said in its lat­est re­port on global wealth.

Asia will be the scene for the great­est ex­pan­sion of the world’s mid­dle class, it pre­dicted.

The Swiss bank said with 109 mil­lion adults “this year, the Chi­nese mid­dle class for the first time out­num­bered” that in the United States at 92m.

While the num­ber of mid­dle class world­wide grew last year at a slower pace than the wealthy, it “will con­tinue to ex­pand in emerg­ing economies over­all, with a lion’s share of that growth to oc­cur in Asia,” Credit Suisse chief ex­ec­u­tive Tid­jane Thiam said in a state­ment ac­com­pa­ny­ing the bank’s an­nual Global Wealth Re­port.

“As a re­sult, we will see chang­ing con­sump­tion pat­terns as well as so­ci­etal changes as, his­tor­i­cally, the mid­dle class has acted as an agent of sta­bil­ity and pros­per­ity,” he added.

The re­port said size and wealth of the mid­dle class was a key fac­tor in eco­nomic de­vel­op­ment, and the mid­dle class was of­ten at the heart of po­lit­i­cal move­ments and new con­sump­tion trends.

The re­port used a floor for the mid­dle class as hav­ing wealth dou­ble the an­nual medium in­come for their coun­try.

While wealth may still be mostly con­cen­trated in Europe and the United States, Thiam said “the growth of wealth in emerg­ing mar­kets has been most im­pres­sive, in­clud­ing a five­fold rise in China since the be­gin­ning of the cen­tury.”

China now ac­counts for a fifth of the world pop­u­la­tion, while hold­ing nearly 10 per­cent of the global wealth.

Over­all, the re­port found that global wealth fell by nearly 5 per cent in the year to mid-2015 to $250 tril­lion due a strength­en­ing of the US dol­lar in which in­come is com­pared.

How­ever if cur­rency ef­fects are stipped out, wealth con­tin­ued to ex­pand at the trend rate since the be­gin­ning of the cen­tury.

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