Opinion | Is China rich or poor? The question will dog Beijing for years in war of words with Washington

China is a small step away from qualifying as a high-income country by World Bank standards, but it has eschewed the label that brings greater responsibilities

As Washington politicises the issue, Beijing must grapple with why so many citizens still earn so little

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Construction workers eat dinner at the end of the day in a migrant village on the outskirts of Beijing on August 17, 2017. Photo: AFP

Published: 12:00am, 7 Mar 2023Updated: 9:36am, 7 Mar 2023

China is just a small step away from qualifying as a high-income economy as defined by the World Bank – or in simpler terms, a rich country.

According to China’s National Bureau of Statistics, national gross domestic product per capita reached 85,698 yuan in 2022, or about US$12,741 based on the yuan’s average exchange rate last year. That puts the country just slightly below the World Bank’s high-income threshold of US$13,205, as of July 2022.

Given China’s likely economic recovery in 2023 – the government has set a conservative target of 5 per cent GDP growth – the country has a good chance, statistically speaking, of joining the world’s “rich club” in this year, absent any black swan events such as a sharp depreciation of Chinese currency.

This is a milestone in China’s economic history, and for most developing countries, it would be a cause for celebration. But not for China.

The government has been keen to retain its “developing country” status, something US lawmakers have already tried to strip from China in a move that would cut aid for the country and force Beijing to take on more responsibility in international organisations. Losing the “developing” tag will challenge Beijing’s positioning in the global governance system, as its foreign policy has been based around the idea that China represents the developing world. As a result, China’s developing country status is at risk of becoming the centre of a diplomatic tussle between Beijing and Washington.

China has good reasons not to want to call itself a rich country. The World Bank’s per capita GDP measurement is just one indicator of a country’s wealth. While China is certainly much richer than it used to be, anyone visiting China’s vast interior provinces or countryside would find it hard to call China a high-income economy.