Opinion | China must grow its middle class as familes get squeezed by job cuts and falling home prices
- China’s economic rise has created a sizeable middle class, but it is now bearing the brunt of changes in the economy
- The typical middle-class lifestyle has quickly become unachievable, as a wave of jobs cuts and falling home values hit urban families
The concept of “middle class” has never been officially adopted in China because of its political implications. Instead, the government uses the economic term “middle-income group” as a substitute.
It remains a debate how “middle income” should be defined and, therefore, how big China’s middle-income group is.
Li Shi, a researcher on this issue, estimated in a recent paper that 460 million people in the country belong to the middle-income group, making up about a third of the total population. He came to the conclusion by adopting a low threshold: any household with a per capita monthly income of at least 3,000 yuan (US$420) is counted as a middle-income family.
That is similar to the standard used in 2020 by the Chinese Academy of Social Sciences, which defined a three-person middle-income family as one with an annual income of between 100,000 yuan and 500,000 yuan. China’s statistics bureau has also said that middle-income households account for over 30 per cent of the country’s population.
In reality, however, families require a much higher income to attain a middle-class lifestyle in China, particularly in large cities, and the official threshold is often ridiculed by the public as being too detached from reality.