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(Source: "China: The Consumer Revolution" by Conghua Li (Singapore: John Wiley and Sons (Asia) Pte Ltd. c1998).

Important changes in Chinese demography and lifestyle are influencing to a large extent the needs and tastes of the new generation of consumers in China. These changes are attributed to underlying social and cultural values such as the desire to prolong life, to relate to other people, to enhance social status, and to assimilate new things. These values, coupled with government policies on market reforms and reducing population growth, have given rise to economic prosperity. China’s GDP grew at an annual average of 9.5 per cent in the last 19 years. Its international trade increased by more than 600 per cent from 1983 to 1995. Foreign reserves had reached $114 billion in March 1997 ($140 billion in mid-1998 – ed.).

National prosperity was also reflected in increasing levels of personal income. Between 1978 and 1995, the consumer price level increased 200 per cent, but incomes increased 600 per cent. By 1995, there were 150 million people in China with an average annual household income above US$3,000. (In Guangzhou City, local officials reported that per capita income in 1997 was registered at US$3,000 which is more than half of Guangdong Province’s $1,200 per capita -ed.)

Table 2 shows the chart outlining the changes in China’s demographics and the supporting government policies that helped shape the needs of consumers.

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