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A couple shop at a Louis Vuitton store in downtown Shanghai. Photo: Reuters
Opinion
Editorial
by SCMP Editorial
Editorial
by SCMP Editorial

Beijing must listen to ‘lucky generation’

  • China is relying on its middle class to become the nation’s new growth engine, so it is important to retain and protect its members

Having created the world’s biggest middle class, China is now looking to it to become the new growth engine through boosting domestic consumption. That means the authorities count on it to take up the slack in a slowing economy that can no longer rely so heavily on exports and investment by spending its new wealth. After all it is the segment of society that benefited most from the country’s economic boom and stellar growth rates over past decades.

Alas, members of the urban middle class are no different from counterparts anywhere when facing uncertainty; they are more concerned about safeguarding their wealth and lifestyle rather than risking exposure when the country seems at the crossroads in its development. As we have reported, those of the “lucky generation” – the product of the “good times” when decent jobs and business opportunities, rising property values and incomes, easy travel and movement of money abroad were all in abundance – are apprehensive about the outlook for prosperity and wealth. The escalating trade war with the United States and weakening of the yuan have compounded their fears.

Why is the ‘road ahead a dark mystery’ for China’s fearful middle class?

Examples abound. A university teacher whose flat bought in 2014 multiplied tenfold in value from 450,000 yuan to 4.8 million yuan (HK$5.3 million) last year is now unsure how to protect her wealth because the value of a second flat bought in 2017 is becalmed. A financial consultant to rich clients for a private bank in Shenzhen says they are all worried about economic and political changes and those with few assets abroad are eager to increase them.

That does not sound like the vibrant and confident middle class China needs for the shift from reliance on exports to domestic consumption. Its members may comprise the “lucky generation”, but how to retain and protect them is very important to the next stage of the country’s development. One of their main demands is a strengthening of the rule of law to provide more protection by a fair and transparent system. That is why Hong Kong and other places have attracted so many members of the young Chinese middle class, even though President Xi Jinping has stressed the importance of the rule of law. If the middle class is to become the new growth engine of the Chinese economy, officials need to listen to their demands.

This article appeared in the South China Morning Post print edition as: Beijing must listen to ‘lucky generation’
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