Asia’s middle class plays the balancing act

Posted: Mon 23 Aug, 2010 12:00 AM

Asia’s middle class segment is likely to be the primary global consumers. Assuming the traditional role this class played in the US and European economies, it will help rebalance the global economy, according to a new report from the Asian Development Bank (ADB).

Strong economic growth in Asia over the past two decades has been accompanied by significant reductions in poverty. Previously poor households have moved into the middle class, states the ADB report, as quoted in Travel Impact Newswire. The middle class of the People's Republic of China (PRC) is currently larger than all others in absolute size, having added 800-million people to its ranks between 1990–2008. In the same period, spending in Asia increased almost three-fold, compared to marginal increases in all other regions, including developed countries. As a result, consumption expenditures by developing Asia are now second only to developed countries.

The emergence of so much new spending power carries with it a host of new environmental and health concerns that until recently were more typical of wealthier parts of Asia and the world. Yet, in balance, expectations are that Asia's middle class, through its sheer size and dynamism, will present a huge opportunity for the region and for the world. The report projects that by 2030 much of developing Asia will have attained middle class and upper class majorities, with the PRC and India expected to provide the largest number of new middle class.

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