Profiting from China's Growing Middle Class

In less than two decades the size of China’s middle class has risen from less than 300,000 people to more than 500 million

Legal & General Investment Management 15 June, 2018 | 8:55AM

This Perspectives article by LGIM's Global Equities fund manager, Shaunak Mazumder, is part of Your Guide to Emerging Markets. All this week, we are focusing on emerging markets, sharing their potential pitfalls – and where you can make a pretty penny.

With a middle class the size of America’s, the scale of China is often underappreciated. Despite slowing GDP growth, a dramatic shift in the underlying mix of goods and services of unprecedented proportions is underway. Having exposure to the right sectors and companies is therefore crucial as China makes its transition to the next era.

The Pudong skyline in Shanghai isn’t the only clear sign of how much has changed in China over the past twenty years. The country’s distribution of wealth has also changed dramatically. As recently as 2000, for example, more than 1.1 billion of China’s 1.3 billion population had a GDP per capita of less than $2,500. By 2017, this number had fallen to just 137 million, with the rest of the population becoming several times richer on average.

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Legal & General Investment Management  is one of Europe’s largest institutional asset managers and a major global investor

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