HSBC economists estimated in a report on Friday that within the next five years, the number of multi-millionaires in China will more than double, and the size of the middle class will expand by nearly half, thereby stimulating consumption in the economy.

The bank estimates that the number of high-net-worth individuals (with investable assets of at least RMB 10 million) in China may increase from over 2 million yuan now to 5 million.

The number of middle classes will grow by more than 45%, from the current 340 million to over 500 million.

A team led by Qu Hongbin, chief economist in Greater China, wrote in the report: “An expanding middle class will support medium- to long-term economic growth, while stronger consumer spending will boost domestic demand, business confidence, and capital expenditure. The rise of the middle class will also increase imports of goods and services and attract foreign companies to invest in China.”

These economists say growing wealth will help China avoid falling into the “middle income trap” and help the government in its efforts to make the economy more consumption-oriented. They said, “It's no exaggeration to say that the middle class can be middle classGuoshuangThe pillars of a circular strategy.”

HSBC expects that in the next five years, Chinese household wealth may grow by about 8.5% each year, and investable assets will reach 300 trillion yuan in 2025, equivalent to about 300% of gross domestic product (GDP) in 2020.

A larger, higher-income middle class means that demand for quality goods and services will continue to rise. HSBC estimates that for every $20 increase in daily expenses of China's newly emerging middle class, China's total consumption will increase by about 1.1 trillion US dollars a year.