China is expected to see the size of its private consumption more than double in the next decade, with the share of services slated to outgrow goods, according to a research report from Morgan Stanley.
The country's private consumption is likely to reach 12.7 trillion U.S. dollars by 2030, making China a global consumption powerhouse and matching the size of the current U.S. market, the investment bank forecast.
A key shift in China's consumption structure over the next 10 years is that consumption of services will overtake that of goods, with the share of services in consumption reaching 52 percent by 2030, the report noted.
The expansion of the country's consumption market will come along with fundamental changes in the domestic consumption landscape.
The purchasing power of Chinese consumers is expected to further grow in the next 10 years as disposable income per capita is projected to double by 2030, according to the report.
Demographic changes, an important factor impacting consumer behavior will also occur in the 10-year span.
The focus of China's consumption demand will shift from the current needs of young consumers to household and retirement services, as people aged between 35-44 and over 55 are expected to dominate the country's purchasing power, according to the bank's calculations.
Meanwhile, continuous government support will contribute to unleashing the country's consumption potential, the report noted.
Chinese policymakers on many occasions underscored enhancing domestic consumption as part of its efforts to promoting the "dual circulation" development paradigm.
Efforts should be made on leveraging the role of consumption in boosting economic development, fostering new consumption models and widening market access in the services consumption sector, according to the country's proposals for the 14th Five-Year Plan.
The report also highlighted other factors in promoting a consumption boom in China, such as the wide adoption of digital technologies, which will improve consumption efficiency, and Chinese families' traditional values of providing strong financial support.
