HONG KONG — Zhuhai and Shaoxing might win your next Scrabble game or trivia match when the clue comes: Name two of China’s richest cities no one’s ever heard of.
While many moneyed shoppers live in Beijing, Shanghai and further west in metropolises like Chengdu or Chongqing, a new report by the Economist Intelligence Unit highlights that Chinese wealth is flourishing in surprising places.
“Some of China’s richest cities do not make the top 20 in absolute terms because of their relatively small populations,” the report said. “However, we estimate that high-income consumers in Zhuhai [in Guangdong province] and Shaoxing [in Zhejiang province], to take two examples, will account for 36 percent and 26 percent of the local populations respectively by 2030, much higher than the national average. This highlights the potential for pockets of demand for high-value-added goods and services outside major conurbations.”
Zhuhai, a city of just over 1 million, is small by China’s standards. It sits just across the border from Macau, a gambling mecca with revenues that dwarf the size of Las Vegas. It’s a common setup for many people to live in Zhuhai but commute daily into Macau for work. A $5.62 billion bridge connecting those two cities to shopping and financial hub Hong Kong is expected to open next year.
Shaoxing, with a population of around 2 million, is located about an hour drive from Hangzhou, a city sometimes described as the Hamptons of China.
The report also identified high-income clusters in western provincial capitals Chongqing, Xi’an and Changsha.
“The number of high-income consumers in the western municipality of Chongqing, for example, will increase almost tenfold in the coming 15 years, raising the overall number above four million,” EIU said. “Comparable gains will be made by interior provincial capitals such as Chengdu [in Sichuan], Xi’an [in Shaanxi] and Changsha [in Hunan]. All three cities have used cheaper labor and land to attract foreign and domestic companies looking to escape rising costs on China’s eastern seaboard.”
Overall, EIU expects nearly 35 percent of China’s population, or around 480 million consumers, will meet their definitions of upper middle-income and high-income by 2030, a sharp jump on the current 10 percent, or 132 million people. “The emergence of this large population, with a personal disposable income of at least $10,000, will alter the consumer landscape in China.”
The report also estimates that consumption will grow at average annual rate of 5.5 percent through the next 15 years, eventually totaling 47.4 percent of nominal GDP, up from 38 percent last year. It’s an increase that would be bigger than the entire consumer economy of the EU today.
In February, China officially became home to more billionaires than the U.S.