This report is by: Morgan Stanley
Read more about it here: Smaller Cities to Drive China’s Consumption Boom
An excerpt from Morgan Stanley:
The population of Shanghai, at around 24 million, nearly rivals that of Texas (27 million) and China's other large cities aren't far behind. Consumers in these urban behemoths—along with their rising per capita net worth—have naturally captured the focus of domestic and international brands.
As China develops into a higher income society, private consumption could grow from its current $4.4 trillion to $9.7 trillion by 2030, according to a recent report from Morgan Stanley Research. Many investors believe that top-tier cities, which are either provincial capitals or so-called special economic zones, will continue to dominate China's consumer economy.
However, the lower-tier cities, which include prefecture- and county-level urban enclaves and already comprise 59% of the country's GDP and 73% of its population, may be bigger engines for spending to fuel economic growth, according to Robin Xing, Morgan Stanley's Chief China Economist. “While investors perceive larger cities as offering the most important consumer base, we believe that lower-tier cities will be bigger, wealthier and more eager to spend, and could contribute two-thirds of incremental growth in national private consumption toward 2030,"" Xing says."
Your On-the-Ground People in China.
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