A fifth of Chinese to be 'affluent' by 2020: report

Twenty percent of the Chinese population will be wealthy enough to be considered "affluent" by 2020, according to research by the management-consulting company Boston Consulting Group.

By then, 280 million people are expected to form the country's affluent class, wielding $3.1 trillion a year of purchasing power, an amount equal to 5 percent of global consumption, the company said.

Boston Consulting defined people who have an annual household disposable income of $20,000 to $1 million as being affluent. By 2020, their consumption will be nearly equal to Japan's total consumption for the same year, 128 percent of Germany's and three times South Korea's, the report said.

Adjusted to take differences in purchasing power into account, the $20,000 starting point for the affluent class is equivalent to an annual household disposable income of $38,000 in the most-developed markets and is near to the medium household income of many developed countries, the company said in its report.

"Much attention has been paid to China's middle class and high-net-worth individuals," said Vincent Lui, a Boston Consulting partner and an author of the report. "But the affluent — (who are) 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 in China tend to replace their old belongings quickly as they pursue emotional gratification, status and recognition. It described them as being relatively sophisticated, a trait they exhibit in their willingness to travel abroad and try out new brands.

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

"A consumer told me he thought he would be more respected for wearing luxury clothing brands. Another said he bought a Mercedes-Benz because he felt embarrassed to drive his Buick to attend a reunion of his old classmates."