The newly released MasterCard Worldwide Index of China's
Affluent shows that the demographic is strikingly young and
evolving quickly. Their spending potential is massive, with all
owning several private properties and putting money towards
recreation, primarily travel.
The index, recently released by MasterCard International, offers
a profile of families on the Chinese mainland who subsist on more
than US$25,000 a year. Of the total, 76% are male; 64% are between
the ages of 31 and 46; 67% are married, and 83% have at least one
university degree.
This half-yearly publication provides insight into the
consumption behavior, attitude, and lifestyle of the Chinese
affluent, as well as their preference on the products and services
provided by ten top brand names.
MasterCard interviewed 300 individuals from Beijing, Shanghai,
and Guangzhou whose household annual income is between US$16,000
and US$50,000, or above. Results show that 25% of the interviewees
fit into the wealthy category with an annual income of more than
US$50,000.
Strikingly Young
Dr. Yuwa Hedrick-Wong, economic adviser to MasterCard Worldwide
in the Asia-Pacific points out, "Chinese mainland affluent is
astonishingly young. There 70% of the affluent are over the age of
45 in Japan, 95% in the Philippines, but only 14% in China." He
also indicates that there are three reasons leading to the
emergence of China's young affluent: first, the surge of foreign
direct investment in China has brought about a large number of
white-collar workers in the transnational corporations; second,
after the reform to the state-owned enterprises, the professional
technicians and senior managers are better paid; third, China's
booming private economy has turned out many successful
entrepreneurs.
Private Property: The Single Most Important
Investment
The survey shows that all the affluent in China own more than
one private condominium. In 2004, 26% of them owned 3 properties,
and 8% owned 4. Their first properties averaged at 129 square
meters, and 49% of them had already made their final payment. In
terms of those who can afford to own a fourth one, 76% of them have
no mortgage on the property. Their fourth properties averaged at
208 square meters. Wong believes that the affluent have viewed
property ownership as a preferred way to invest their funds, but
the housing prices won't be influenced much by this. As much as the
affluent may like property ownership, they know that they need to
diversify and as the housing boom moderates in the future, they
will seek other venues to channel their investments.
Enormous Recreation Expenditure
In 2006, 92.6% of affluent families spent up to US$10,000 on
recreation, in which traveling was the primary expenditure,
followed by body building, theme parks, sports, and social life.
During the past year, 43.3% of them have traveled domestically at
least 3 times, and around 30% have gone overseas for more than
three trips.
Hong Kong remains their most favored destination outside the
mainland. Other attractions include: Macao (51.7%), Thailand
(34.8%), Singapore (30.5%), and Japan (18.7%). Less than 10% of the
segment visited France, Germany, or Italy in 2006. "These countries
will develop into tourist destinations as popular as the US and
Australia," said Wong.
Hong Kong tops the list of the most frequent business trip
destinations for mainland affluent, thanks to its strong economic
links with the mainland. Ranking second and third are the US and
Singapore among those from Beijing, Singapore and Japan among those
from Shanghai, and Macao and Thailand among those from
Guangzhou.
In addition, almost half of the affluent prefer sightseeing on
domestic travels, while less than a quarter favor historical sites.
More interesting, the travel patterns of the three developed cities
differ greatly: Seaside resorts are the favorite of nearly one
third of Beijing's affluent, but not with Shanghai and
Guangzhou's.
Watching foreign movies is the most popular recreation among
this segment. Statistics show that it is favored by 81.5% of the
affluent in Beijing, 86% of those in Shanghai, and 63.8% of those
in Guangzhou, usually by young and well-educated females.
About 79% of the segment believes work is as equally important
as recreation, working 8 to 10 hours a day on average.
Value Family Life and Support Public Welfare
The affluent class values family life. They believe that a happy
family is the most precious thing in one's life, and spending time
with family is a priority. However, they are also ready to
sacrifice family time for work.
The affluent are also keen on the public welfare. About 73.6% of
them support public welfare, and 38.9% are in favor of
environmental protection. The ratios of their other public welfare
activities are: blood donation (29.6%), volunteer work (21.8%), and
cultural heritage protection (8.2%). About 39.5% of them said that
they would continue to engage in public welfare and environmental
protection, but there were still many of them who have yet to get
involved.
(China.org.cn by Lu Lu August 15, 2007)