SOYMB has reservations on the article's loose use of the term "middle class". "Middle income" may be a more appropriate term, but notwithstanding that, it makes interesting reading for those with an interest in Chinese society.
A headline in Forbes proclaimed the rise of China’s middle class to be “The Biggest Story of Our Time.” Such a statement is an hyperbolic oversimplification. Although the U.S. middle class has been squeezed and manufacturing has been outsourced to developing nations such as China, there has not been a corresponding rise in the Chinese middle class like that seen in the United States after World War II. Rather than a middle class of laborers in the manufacturing industry, China has seen disturbing levels of income inequality and the emergence of a new “elite” class at the same time that the United States is experiencing similar shifts.
Rumors of a rising Chinese middle class have been touted widely. However, the evidence supporting these claims remains conflicting at best. The “middle-class” jobs outsourced from the United States have not necessarily translated to “middle-class” jobs in developing nations, especially in China. Defining the middle class has always been a difficult venture, but on several fronts the Chinese middle class remains nascent.
Using wages as an indicator, the manufacturing jobs in China fall far short of providing a middle-class lifestyle .Even in Shanghai, these wages are below middle-class. And while wages maybe are rising, they won’t reach middle class wages any time soon. Workers lack the human capital, access to healthcare or education, and consumer behavior that are generally indicators of a middle class.
Perhaps a more important indicator of middle-class status is consumption behavior. A 2010 OECD report using consumption as an indicator found that the Chinese middle class constituted only 12 percent of the population. This is simply not large enough and China still has a long way to go before it can claim a legitimate middle class capable of driving healthy economic growth through its own consumption, rather than relying on exports to other countries.
If China has been experiencing near double-digit growth in GDP yearly where has all the growth gone? In fact, rather than creating a new middle class in China, outsourcing has contributed to the rise of a new elite class. The disproportionate benefits of China’s near 10-percent annual GDP growth over the last 30 years have been appropriated by a small minority (not too unlike the current situation in the United States).
Though growth has benefited all Chinese citizens to some degree, wage inequality has exploded. China’s Gini coefficient (a measure of inequality) has increased to roughly 45.3, approaching levels of dangerous inequality (compared to the U.S. score of 46.8 in 2009). Thus, rather than replicating the middle-class growth of post-World War II America, China appears to have skipped that stage altogether and headed straight for a model of extraordinary productivity but disproportionately distributed wealth similar to the contemporary United States.
The arrival of a new elite class in China does not come from the throngs of factory workers, but on the backs of those workers.
Source
A headline in Forbes proclaimed the rise of China’s middle class to be “The Biggest Story of Our Time.” Such a statement is an hyperbolic oversimplification. Although the U.S. middle class has been squeezed and manufacturing has been outsourced to developing nations such as China, there has not been a corresponding rise in the Chinese middle class like that seen in the United States after World War II. Rather than a middle class of laborers in the manufacturing industry, China has seen disturbing levels of income inequality and the emergence of a new “elite” class at the same time that the United States is experiencing similar shifts.
Rumors of a rising Chinese middle class have been touted widely. However, the evidence supporting these claims remains conflicting at best. The “middle-class” jobs outsourced from the United States have not necessarily translated to “middle-class” jobs in developing nations, especially in China. Defining the middle class has always been a difficult venture, but on several fronts the Chinese middle class remains nascent.
Using wages as an indicator, the manufacturing jobs in China fall far short of providing a middle-class lifestyle .Even in Shanghai, these wages are below middle-class. And while wages maybe are rising, they won’t reach middle class wages any time soon. Workers lack the human capital, access to healthcare or education, and consumer behavior that are generally indicators of a middle class.
Perhaps a more important indicator of middle-class status is consumption behavior. A 2010 OECD report using consumption as an indicator found that the Chinese middle class constituted only 12 percent of the population. This is simply not large enough and China still has a long way to go before it can claim a legitimate middle class capable of driving healthy economic growth through its own consumption, rather than relying on exports to other countries.
If China has been experiencing near double-digit growth in GDP yearly where has all the growth gone? In fact, rather than creating a new middle class in China, outsourcing has contributed to the rise of a new elite class. The disproportionate benefits of China’s near 10-percent annual GDP growth over the last 30 years have been appropriated by a small minority (not too unlike the current situation in the United States).
Though growth has benefited all Chinese citizens to some degree, wage inequality has exploded. China’s Gini coefficient (a measure of inequality) has increased to roughly 45.3, approaching levels of dangerous inequality (compared to the U.S. score of 46.8 in 2009). Thus, rather than replicating the middle-class growth of post-World War II America, China appears to have skipped that stage altogether and headed straight for a model of extraordinary productivity but disproportionately distributed wealth similar to the contemporary United States.
The arrival of a new elite class in China does not come from the throngs of factory workers, but on the backs of those workers.
Source
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