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Economy

China's Consumption Engine: 280 Million Chinese To Be "Affluent" By 2020

CAIXIN MEDIA, CHINA DAILY (China), BOSTON CONSULTING GROUP (USA)

Worldcrunch

BEIJING- China’s middle class will triple in the next 10 years, according to a new report by the Boston Consulting Group (BCG). By 2020, it should have 280 million affluent consumers, representing 35% of the country’s consumption and 5% of the world’s total consumption.

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Photo Jonathan Kos-Read

The report, titled The Age of the Affluent: The Dynamics of China’s Next Consumption Engine, says “China is projected to overtake Japan and become the world’s second-largest consumer market” in the next three years.

Today, writes Caixin media, China’s affluent population is estimated at around 120 million people, with a combined annual buying power of around $590 billion.

According to the BCG report, China’s affluent class is defined as having an annual household disposable income between $20,000 and $1 million. The upper affluent class – those earning between $40,000 and $1 million -- will account for 20% of the 280 million affluent. Their spending is expected to be multiplied by five in the next ten years, representing $3.1 trillion.

"Much attention has been paid to China's middle class and high-net-worth individuals," said Vincent Lui, a BCG partner and an author of the report, according to China Daily. "But the affluent - richer than members of the middle class but not as wealthy as the super-rich - have spending habits and attitudes that are distinct."

The report said affluent consumers replaced their old belongings quickly as a way to pursue emotional gratification, status and recognition. It also described them as being relatively sophisticated, a trait they exhibit in their willingness to travel abroad and try out new brands, according to the China Daily.

"A lot of affluent consumers buy luxury brands in response to social necessity and peer pressure," said Angela Wang, managing director of BCG.

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Photo of women walking in Ecuador

Women walking in Guangaje Ecuador

Camila Albuja

SARAGURO — Here in this corner of southern Ecuador, life seems to be like a mandala — everything is cleverly used in this ancestral system of circular production. But the women of Saraguro had to fight and resist to make their way of life, protecting the local water and the seeds. When weaving, the women share and take care of each other, also weaving a sense of community.

With the wrinkled tips of her fingers, Mercedes Quizhpe, an indigenous woman from the Kichwa Saraguro people, washes one by one the freshly harvested vegetables from her garden. Standing on a small bench, with her hands plunged into the strong torrent of icy water and the bone-chilling early morning breeze, she checks that each one of her vegetables is ready for fair day. Her actions hold a life of historical resistance, one that prioritizes the care of life through the defense of territory and food sovereignty.

Mercedes' way of life is also one that holds many potential lessons for how to do agriculture and tourism better.

In the province of Loja, work begins before sunrise. At 5:00 a.m., the barking of dogs, the guardians of each house, starts. There is that characteristic smell of damp earth from the morning dew. Sheep bah uninterruptedly through the day. With all this life around, the crowing of early-rising roosters doesn't sound so lonely.

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