A new report on Chinese middle-class households sheds light on their geographic distribution and investment proclivities.
The “2019 New Middle-class Household Consumption and Wealth Management Report” (2019新中产家庭消费与理财报告) defined China’s “new middle-class households as those with annual income of over 200,000 yuan (approx. USD$28,809), whose members have received higher educations and are in professional or administrative roles.
The report which was released in early January was jointly prepared by Tencent Licaitong (腾讯理财通) and the 21st Century Research Institute (21世纪经济研究院).
According to the report these households are currently most heavily concentrated in major cities around China, with Beijing host to the largest number of middle-class households, followed by Shanghai in second place, Shenzhen in third and Guangzhou in fourth.
57.5% of these households saw their incomes rise in 2018, while 26% received end of year bonuses in excess of 50,000 yuan.
Income changes of Chinese middle-class households in 2019
|Income shift in 2019||Share of Chinese middle-class households|
End of year bonuses of Chinese middle-class households in 2019
|End of year bonus||Share of Chinese middle-class households|
|No end of year bonus||22.5%|
|Less than 10,000 yuan||16.0%|
|10,000 to 50,000 yuan||35.5%|
|50,000 to 100,000 yuan||12.2%|
|100,000 to 200,000 yuan||4.6%|
|Over 200,000 yuan||9.2%|
94.2% of China’s new middle-class households reported positive returns on their investments in 2019.
Returns on investments of Chinese middle-class households
|Returns on investment||Share of Chinese middle-class households|
|0 – 4%||39.8%|
|4 – 10%||35.4%|
|10 – 20%||6.6%|
Preferred investment choices are funds, wealth management products and real estate, while Chinese middle-class households prefer to deal with banks and online wealth management platforms.
Preferred investment vehicles of Chinese middle-class households
|Investment vehicle||Share of Chinese middle-class households|
|Funds and wealth management products||65.3%|
|Shares in list companies||31.1%|
Preferred financial and investment platforms of Chinese middle-class households
|Platform||Share of Chinese middle-class households|
|Third party online wealth management platforms||54.6%|
Chinese middle-class households would prioritise an increase in their expenditures on education for their children, as well as travel and their own educational opportunities.
Spending increase priorities of Chinese middle-class households
|Spending area||Share of Chinese middle-class households|
|Health and medical treatment||11.7%|
|Real estate rent and loans||10.8%|