By Allen Ai
China’s middle class is projected to reach 40% of the population in 2020, twice the proportion at the turn of the century, according to the International City Development Report released jointly by the Social Sciences Academic Press and Shanghai Academy of Social Science
According to the report, the next ten years will be a crucial transition period in China’s economic development. China’s urbanization rate was 47% in 2010, and by 2020, it is expected to reach 55%. During this period, some 150 million Chinese people will migrate from the farms to become city dwellers.
Last year, the GDP of Beijing and Shanghai grew 8% and 8.2% respectively. Both cities were, according to Tu Qiyu in Shanghai Academy of Social Sciences, laggards in GDP growth compared to other major Chinese cities. This had to do with their high level of openness and internationalisation, he explained.
The greater the level of openness and the more internationalised a city is, the more vulnerable it will be to international financial crises, added Tu.
Because of the high costs associated to living and working in the top-tier Chinese metropolises, population growth and urbanisation will mostly be concentrated in medium-sized cities going forward.
This means that it will take more for any business enterprise that hopes to reach the Chinese masses. In 2005, an enterprise needed to enter 60 cities to cover 80% of the middle class. By 2020, it will need to be present in 212 cities to maintain the same coverage.