China Center Chart of the Week: Household consumption in China remains highly concentrated

This China Center Chart of the Week shows Monthly Sales of Retail Goods for 242 tier 1 to tier 3 cities (officially called “prefectures and above” cities) for the first three quarters (January to September) of 2014. The chart also shows the decreases in share that some of the 242 cities experienced as compared to the same period in 2008, and the increases in share that some cities experienced.

The concentration of consumption among Chinese cities did not change much in the past year. The charts specifically do not indicate that lower-tier cities are contributing more and more to consumption in China.

As economic growth slows, it is likely that household consumption in China will remain highly concentrated--at least until newly urbanized cities develop their own economic dynamism capable of driving employment and income growth, and consequent consumption. It is a concern that the government’s current urbanization plans do not address how economic activity will be sparked and cultivated in China’s vaunted new constructed cities.