It is projected that the average pre-tax Urban household income will grow from Rmb 77,374 pa in 2011 to reach Rmb 133,909 pa in 2021. This is 5.6% per annum for that time period.

Rural Incomes are projected to grow at 5.6% per annum and are much lower in absolute value than that of urban households.

In the next decade to 2021, the number of households with an income over Rmb 140,000 will go from 27 million to reach 96 million. That is an additional 69 million affluent households.

The Rmb 100,001 to Rmb 140,000 segment grows by 15 million households over the next 5 years. That is a 51% increase. It shows virtually no growth after then.

The obvious conclusion from this is to focus on the 100,000 plus segment for the next 5 years and then move to the Rmb 140,000 plus segment after 2016.

Eoin Treacy's view These are ambitious targets but appear to be more or less in line with other major patterns of industrialisation. The evolution of the consumer sector in China as well as across Asia, the Middle East, Africa and Latin America is a secular theme. The global population went from being mostly rural to mostly urban in the last few years. Companies offering to meet the basic requirements of people new to the sensation of discretionary income continue to outperform. This is likely to remain a compelling bull theme for the forseeable future. (Also see Comment of the Day on December 9th for a list of related Autonomies).