Hong Kong SCMP diagnoses the economic situation of China’s middle class
Chinese central bank advisor: “Most middle class base is weak”
As China’s economic slowdown continues, warnings have been issued that China’s middle class, estimated at about 400 million people, is at risk of shrinking unless the authorities come up with an urgent solution.
On the 22nd, Hong Kong’s South China Morning Post (SCMP) said, “The world’s largest middle class is at risk as middle-class wealth continues to disappear amid China’s prolonged real estate market recession and falling stock prices. Without a strong economic recovery, the 400 million middle class will disappear.” “The group may shrink,” he said.
SCMP also pointed out, “The shrinking of the middle class will also threaten China’s efforts to become an advanced economic power by doubling the size of the middle class as part of ‘common wealth.’”
Although there is no clear definition of the middle class in China, the National Bureau of Statistics generally classifies the income class as the middle class with an annual income of 100,000 to 500,000 yuan (about 18.5 million to 92.8 million won) for a three-person household. There are about 140 million households and 400 million people in this group, which accounts for about 30% of the total population (1.4 billion people).
Most middle-class households barely exceed the threshold (standard), and the problem is that their foundation is weak.
“This group (middle class) is the most vulnerable to economic shocks such as the pandemic and real estate downturn,” said Wang Yiming, policy advisor at the People’s Bank of China. “We have to shoulder it,” he said.
Advisor Wang argued, “It appears that many of these people are close to the lower limit (of middle class standards),” and that “policy support is needed to increase their income.”
It has been shown that the wealth of China’s middle class is decreasing, leading to a decline in consumption.
According to the ‘2023 New Middle Class White Paper’ published by Wu Xiaobo, a Chinese economic critic, based on a survey of the middle class aged 31 to 40, as the growth of China’s middle class wealth slowed last year, reluctance to spend increased.
Additionally, according to the white paper, 11.4% of middle-class households reported that their assets had decreased by more than 30%, and 28.9% responded that their assets had decreased by 10-30%. Only 24.8% of respondents said their assets increased last year.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.