Can Emerging Markets Help Sustain Global Consumption?

With economic growth in most developed countries stagnating, and many facing the possibility of another recession, economists have been looking to emerging markets like India and China to sustain global consumption. But according to a survey by research firm TNS, 80% of affluent households — defined as those having wealth of $100,000 or more — are in Western Countries. The U.S., for example, has 10 times more affluent households than China or India, despite the latter two having significantly larger populations.

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Both China and India have roughly 3 million affluent households, while the U.S. has more than 31 million, according to a TNS survey, challenging hopes that booming Asian markets can supplant the U.S. in terms of consumption. While China has surpassed Germany, France, and the U.K. when it comes to the number of affluent, it will be a long time until the world’s second-largest economy can catch up to the first in this particular category.

In the U.K., 2.9 million households have liquid assets worth more than $100,000, while there are 2.5 million affluent households in Germany and 2.7 million in France. Of course, when looking at the affluent as fraction of a nation’s total population, China and India can’t compete with most Western superpowers. The incidence of affluence in the U.S. is 27%, while 20% of Canadians are considered affluent, according to TNS, and 11% of the population of the U.K. are affluent. In China, the proportion is just 0.75%, while India’s affluent make up 1.25% of the country’s population.

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China has the world’s fourth-largest population of millionaires, but the top three — the U.S., Japan, and Germany — account for more than half of the world’s millionaires, and all three nations are facing economic slowdowns.