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Subject

China's middle class.

Significance

The purchasing power of China's middle class is not expanding as quickly as anticipated due to slow progress in 'rebalancing' economic growth from investment to household consumption, and, more recently, the slowdown in GDP growth overall. However, despite the slowing economy, the middle class still enjoys relatively secure employment, and its numbers are still growing.

Impacts

Growth of the middle class will shift geographically, away from the coast towards smaller, inland cities.

Middle-class consumers will pay a premium for high-quality, discretionary goods from established brands.

Domestically, leisure, entertainment, electronics and cars will be among the greatest beneficiaries of middle-class spending.

Internationally, education, insurance and tourism will be among the greatest beneficiaries.

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