Middle-Class Society China: Insurers and Reinsurers are facing big Opportunities and Challenges
Middle-Class Society China: Insurers and Reinsurers are facing big Opportunities and ChallengesQuelle: Rob Z/ Fotolia
Erschienen in Ausgabe 2-2019Schlaglicht

Attractive Target Group

The Rising Middle Class in China and its Implications for Insurance and Reinsurance

Von Lihong WangVersicherungswirtschaft

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China has become a superpower economy in the world. The industrialization and increased domestic and international trades have supplied large numbers of people with a disposable income with which they can be considered as a middle class (a social group, neither too poor nor too rich, according to the Cambridge dictionary). The middle class, according to the World Bank, has a disposable income of 10 to 50 dollars a day, after paying for basic needs such as food and accommodation. It is the backbone of the economy, a stabilizer for society and the force of consumerism. In 2012, McKinsey and Company began a study on this social group. They firstly defined the Chinese middle class as those earning RMB 60,000 to 229,000 ($9,000 to $34,000) a year in 2012. According to their report, by 2022, more than 75 per cent of China’s urban consumers, or the equivalent of 550 million people will become middle class. This is strongly contrary to the trend in Europe and the US, where the size and proportion of the middle class in Western countries have been on the decline for decades. A Chinese report published on Channel Wu in 2017 defined the middle class as those with an annual income of between 100,000 and 500,000 Yuan ($15,000 to $74,000). It also further described the middle class as “a highly educated, highly productive and skilled labour force”; “many hold a degree, speak at least one foreign language, and are very comfortable with the Internet and therefore the driving force behind China’s internationalism.”

Young, Well-Educated and Connected Online

According to Channel Wu, members of the Chinese middle class usually hold a degree, live in big cities and have disposable income. The survey revealed that many in the emerging middle class were born in the 1980s, graduated from colleges, speak at least one foreign language and lead a Westernized lifestyle. Henry Chu wrote in the Los Angeles Times about the new generation of the Chinese middle class:  “They are smart, confident, and optimistic. They emphasize quality of life – and are increasingly able to pay for it. They work and socialize with like-minded people, forming loose networks with fellow travellers on the road to greater personal freedom and fulfilment.” They are familiar with the Internet, social media and spend a lot of time shopping online. There are more than 600m “netizens” in China, and the number is still growing. The emerging middle class, thanks to higher paid jobs in technology and financial sectors…