In terms of the global economy, China’s middle class is now more significant than its factory workers. Photo: Procon Pacific website
Asian Angle
by Kerry Brown
Asian Angle
by Kerry Brown

Xi is not the boss in US-China struggle. Neither’s Trump. Here’s who is

  • As the Chinese and American presidents meet at the G20 summit in Japan both are ultimately trying to appeal to one group of people
  • The Chinese middle class is the greatest economic asset on the planet

Who are the people in charge of the new China which is flexing its muscles almost daily across the rest of the world? Who has most power in this story of China’s renaissance, as it becomes so important even the mighty US now has to pick fights with it in order to restrain it?

A simple answer would be the leadership of the Communist Party, and in particular the all-dominating figure of China’s president, Xi Jinping. Xi stands front, centre and back in the politics of the country, reducing by a magic sleight of hand a story of immense complexity to one that can be summed up in a few words: centralisation of power, autocracy, and authoritarianism.
There are ways in which these would be accurate descriptions of what can be seen happening in the country today. In the negotiations with the US, Xi seems to have been handling matters largely on his own, with Liu He simply his messenger.

But look a little harder, and there are other figures lurking in the background, and making up a much vaster and more deeply powerful cohort. These are not even in the party. They are not an easy group to adequately describe and conceptualise. This is for the very simple reason that their existence and their emergence is so recent that no one, inside or outside China, has had much time to work out their meaning and what kind of common identity they might have.

Just the messenger? Chinese Vice-Premier Liu He. Photo: EPA
Even so, the emerging Chinese middle class is the key in this fable we see unfolding. As Xi and Donald Trump meet at the G20 in Japan in their latest effort seeking a breakthrough in the US-China trade war, it is ultimately this group of people they are trying to appeal to.
China’s rapid economic development, and its equally rapid urbanisation, are the forces that have created this group so quickly. Two decades ago, as China entered the World Trade Organisation, talking of a major middle class that had global significance would have been fanciful. Back then, in the words of the premier at the time, Zhu Rongji, China was the “factory of the world”. Migrant labourers, and those working in factories, were the people of most interest.

These days, though, it is the car owning, commuting, mortgage paying, Western-branded-clothes-wearing bourgeoisie of China that matter most. The irony is rich. The world’s largest state where a single party has a monopoly on power – and a communist one at that – is also the one where a middle class like this seems to be increasingly central to government, and international, intentions.


There is one simple reason for this. This middle class lies at the heart of all the key hopes of Xi’s government to change the structure of the Chinese economy to a higher-quality one, and to make China a global innovation leader. Its members are also, as yet, surprisingly low consumers. Napoleon, according to legend, says when China stands it will shake the world.

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In fact, we can update this. When this middle class spends like its equivalents elsewhere, it will not only shake the world, but probably tilt it from its axis.

Already the signs are there of how massive the impact of this group can be. China had 140 million tourists last year. They were by far the highest spending in most places they visited. Paris, London, New York get good amounts of their GDP thanks to this group. Apple, in the past, grew mighty and cash rich selling to this group.
Huawei is hoping it can make it through its current travails by flying on the back of demand from the 300-million-strong and growing middle class of China.
Lifeline: Huawei hopes it can make it through its current travails by flying on the back of demand from the 300-million-strong and growing middle class of China. Photo: Reuters

Xi speaks to this group, with their aspirations and their complexity, in the language of nationalism. While there are plenty of party members in its ranks, the vast majority are non political – but that does not mean they are apathetic. They want to see their country accorded a high status. They celebrate with their formal political leaders China’s renaissance, and they are glad to see their country paid global respect.

Picking a fight as the US has done with Xi and his government, and saying it is they, not the people, that are the real issue is tricky. The links between the two are complex and layered. But the Chinese middle class is likelier to be reading Warren Buffett and the story of Jack Ma than the Communist Manifesto. Most of its members might not even be aware that the latter exists!
The Chinese middle class is the greatest economic asset on the planet. Photo: Reuters

The Chinese middle class is the true heart of the modern Chinese story, and the key voice dictating how this will unfold. Xi, in many ways, is their servant. Were he ever to lose their support, he and the party he leads would quickly be gone.


This is unlikely today, when growth is around 6 per cent. Lower than this, and the country that has never known recession in 40 years stands a good chance of becoming a very different place, one far less hospitable to Xi’s style of autocratic rule.

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One final thing to remember is that this group is the greatest economic asset on the planet. Its ranks are likely to double in the next decade or so. These people are the ones that the US, Europe and others want access to – to sell goods, services, and to see if they are more politically open minded than their current rulers. One thing we can say with certainty – perhaps the only thing – is that this group is not an uncomplicated one.


No one, neither in Beijing, nor Washington, nor Brussels, should be complacent about their capability and their potential impact on the world.

They are the masters of the story we are seeing. The current leaders in Beijing are simply the shadows standing before them.

Kerry Brown is professor of Chinese Studies and director of the Lau China Institute at King’s College, London, and an associate on Chatham House’s Asia-Pacific Programme