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Middle class forefront of Asia's consumption-driven growth
Last Updated(Beijing Time):2012-04-03 21:39

The rise of middle class in Asian countries, led by China and India, will help restructure the region's economic growth, according to government and business leaders meeting at an economic forum this week.

Former Japanese Prime Minister Fukuda Yasuo said at the three-day Boao Forum for Asia (BFA) that Asia's middle class is expected to reach 2 billion by 2020, more than double the figure at present.

With more disposable income to hand, the middle class's spending habits have already shifted from essentials to more sophisticated products and sometimes luxury goods, indicating an improved quality of life.

Rick Kash, vice chair of Dutch media conglomerate Nielsen, said Asia, excluding Japan, made up only 3 percent of the world's middle class in 1975 and their purchasing power accounted for a mere 2 percent of the middle class worldwide, but these figures surged to 24 percent and 16 percent in 2010 respectively.

Restructuring Asia's emerging export-oriented economy has been a worldwide priority as the global economic meltdown in 2008 substantially weakened demand from Western consumers.

At Boao, Chinese Vice Premier Li Keqiang urged Asian countries to "promote internal drivers of growth" in a bid to tap the potential of both the domestic and regional markets to achieve sustainable growth.

A report by Asian Development Bank (ADB) published in 2010 states that the middle class is not easily defined as it is not necessarily a distinct or unique group in a society that has very different attributes or values than other social classes.

However, it describes Asia's rapid expansion of its middle class as a "fundamentally important" driver not only of the Asian economy but also the global economy. By 2030, middle class Asians are expected to become the next global consumers and assume the traditional role of the U.S. and European middle classes.

Fan Bi, an official with the policy research institute of China's State Council, said the middle class -- with their appetite for sophisticated goods and large spending power -- has become the main population group to spur consumption in China.

Fan said the government is considering policies to give consumption a more defining role in driving China's growth.

But he also noted that the restrictions on free population flow, mainly caused by the household registration or hukou system, block people from the countryside from becoming part of the middle class.

"Why is the middle class is mainly composed of urban residents?" Fan asked. "We should create a fairer environment for competition and distribution of resources, otherwise fewer rural residents will ascend to the rank of the middle class."

He said the government is determined to address the issue of equality, which has been fueling public discontent, particularly toward the second generation of the rich and powerful, to ensure the rise of middle class does not create conflict.

The forum concluded on Tuesday evening in Boao, a scenic town on the eastern coast of Hainan, the country's southernmost island province.

Source:Xinhua 
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