Middle-Class Leverage

Based on HSBC's calculations, by 2025, China's middle-class population would have reached a staggering 1 billion.

In China, no seismic demographic growth happened by chance. Paramount to Beijing's economic strategy is to make the world's second-largest economy a "moderately prosperous society in all respects" by 2020.

The magnitude of this middle-class growth is already transforming the nation and its economy.

Chinese companies are emerging as world-beaters in many industries, by tapping on this immense domestic consumption class, with rising GDP per capita enabling more consumers to afford cars and other consumer discretionary.

Chinese consumption is expected to grow 9% a year through 2020, according to the Boston Consulting Group. Overall, the consumer economy is forecasted to grow by 55 percent, to US$6.5 trillion. That's an increase of US$2.3 trillion - which is like adding a new consumer market 1.3 times larger than the current consumer markets of Germany or the U.K. And that's assuming that China's GDP will grow by 5.5 percent a year, which is lower than the projected growth of 6.5 to 7 percent a year.