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Monday, February 21, 2005

Middle class society a long way off in China

http://www.chinadaily.com.cn/english/doc/2005-02/18/content_417241.htm

Middle class society a long way off in China
By Deng Yuwen (China Daily)
Updated: 2005-02-18 00:48

There is still a long way to go before the much-anticipated middle class becomes a mainstream, accountable group in China.

The talk about China's middle class among research institutes and experts has been growing as the country's economic advancement gallops apace.


A man walks past a billboard featuring two Chinese characters which read "zhong chan," meaning "middle class" or "middle property" in this file photo. [newsphoto]

There were, according to a report released by the Chinese Academy of Social Sciences (CASS), 35.18 million middle class members in China last year, which is about 2.8 per cent of the total population.

BNP Paribas, a French bank, defines members of China's middle class as well-educated professionals with an annual income between 25,000 yuan (US$3,010) to 30,000 yuan (US$3,610), or household income between 75,000 yuan (US$9,040) to 100,000 yuan (US$12,050).

According to this criterion, about 13.5 per cent of the country's population now belong to the middle class.

Last month, a study conducted by the National Bureau of Statistics (NBS) claimed that China's middle class is formed by those whose annual household income of a three-member family is between 60,000 yuan (US$7,230) to 500,000 yuan (US$60,240). About 5.04 per cent of the population falls in this category.

Obviously, as the definition varies, so does the final head counts.

In my view, income should not be the only index used to define the middle class. Other elements such as social status, profession, social contacts must also be taken into account.

Many people are aspiring to join the ranks of the middle class, which features high income and a perceived elegant life-style.

Moreover, the emerging middle class in itself is of great significance.

A recent survey in South China's Guangdong Province, one of China's most affluent regions, found that most of those surveyed thought themselves to be middle class.

It is a stark contrast with just a decade ago when there were hardly anyone who dared to aspire to join this social rank.

But our optimism about the swelling middle class should be well guarded.

The current hullabaloo among the public, media and research institutes alike misses the point.

They are putting too much focus on the concept of a middle class while failing to delve into the substance of what the middle class is and what affect it has on society.

It should be pointed out that the middle class is not simply a concept.

A lot of challenges must be removed before a middle class society can be whipped into shape.

In China, such challenges abound.

If nearly half of the population do join the ranks of the middle class by 2020, as forecasted by CASS and NBS studies, then who will provide the hundreds of millions high-paid jobs needed to sustain the life-style so sought after?

A considerable portion of the current middle class members are employees working in foreign ventures.

To some extent, their footing is not solid because job availability will be affected by the flow of international capital.

Even if more such jobs were in place, there are other pressing challenges the nation needs to overcome to usher in a middle class society.

According to the World Bank, only when urbanization is over 50 per cent and the service sector accounts for more than 50 per cent of the economy, is it possible for a middle class to become a mainstream, accountable social group.

However, China's urbanization is now less than 40 per cent and its economy is still dominated by industry.

Resolving the employment issue of laid-off workers from State-owned enterprises (SOEs) and transfer of farmers to cities, for example, are two thorny problems.

In addition, there are still 30 million farmers and 20 million urban poor who need to shake off their poverty curse.

Without the settlement of these problems, a middle class society will never come into being.

A middle class society also calls for a well-developed rule of law in which private property, individual rights and the right to participate in public affairs are well protected and guaranteed.

We should remain cool-headed as we brace the middle class mania currently carving up our socialist society.

For there is a long way to go before the middle class becomes the mainstay of China.

(The author is an editor at the Beijing-based Study Times newspaper)

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