Steady wage growth and fewer savings will put China on a smooth track to overtake the United States as the world's largest consumer market, according to a report recently released by Credit Suisse.

Household incomes of the bottom 20 percent of earners rose 50 percent between 2004 and 2009 while the top 10 percent surged 255 percent. Meanwhile, the average savings rate decreased from 26 percent to 12 percent during the same period, said the report.

The upward trend is likely to continue and will help China account for 23.1 percent of global consumption in 2020, up 5.2 percent from 2009, according to the report.

"At present, the reduced savings are spent mainly on housing, including mortgages and rental payments--a reflection of the desire among Chinese to improve their living conditions, and one that also shows the burden of rising property prices," said Vincent Chan, head of China Equity Research at Credit Suisse.