The Chinese Academy of Social Science (CASS) has estimated that approximately half of the
urban population in China will be middle-income residents by the year 2023. The resulting
prediction would create a middle class population of over 450 million.

China has explained that its priority in the coming years is to move its citizens into the middle-
class while also growing the wealth of those who are already middle class citizens. As Adam
Roseman explains on the ARC China website, more Chinese workers will start moving from the
countryside to the city in the coming years, creating a potential increase of RMB 20 trillion to the
economy of the country.

While it will certainly take awhile for the full spending potential of this growing middle class
to be realized, there are many signs that this potential is already starting. As Roseman of ARC
Investment Partners wrote, “By 2025, some estimate that the urban households in China will
make up one of the largest consumer markets in the world, spending about 20 trillion RMB
annually.”

Certainly, ARC Investment Partners recognizes this incredible potential that China is generating
and they are focusing their attention on this consumer consumption market and on the growing
potential in China.