50% of people to be middle class by 2020

2007-12-26 18:00:58  China Daily      

More than half of the population will be middle class by the end of the next decade, a top Communist Party planner said Wednesday.

Zheng Xinli, the vice-minister of the Communist Party's central policy research office, said that taking price changes into account, 55 percent of the population will be middle class by 2020, with 78 percent of city dwellers and 30 percent of those in rural areas reaching that status.

Zheng said being middle class is currently defined as having an annual household income of between 60,000 yuan ($8,200) and 200,000 yuan.

Expansion of the middle class is seen as part of the country's efforts to quadruple its per capita gross domestic product by 2020, as set by the 17th National Congress of the Communist Party of China in October.

Last year, the per capita income was $1,500.

"A growing middle-income population will ensure more people benefit from reform so that it is in turn endorsed and supported by more people," Zheng said at a press conference by the State Council Information Office.

He said a larger middle class will also challenge the government to provide better social security, services and education for the people.

"If such a structure of income distribution is put in place, it will have a far-reaching impact on the economic, social and political development of the country," he said.

To help low-income earners, the government will take measures to increase salaries and boost other sources of income such as capital gains from bank deposits, securities and real estate, Zheng said.

He did not say how many of the country's 1.3 billion people were currently middle class.

By defining a middle-class household as one which has a combined annual income of more than 2.5 times the national average wage, professors at the Academy of Social Sciences estimated that between 4 per cent and 5 percent of households are currently middle class, with the figure as high as 15 percent in major cities.

According to figures from the World Bank, since the late 1970s and due to huge economic growth, some 400 million people in China have been lifted out of poverty.

However, this has also led to wide income gaps between the urban and rural populations, and among employees within different industries, figures from National Bureau of Statistics have shown.

While hailing efforts to make more people well-off, Professor Xia Xueluan of Peking University said that elevating more people to the middle class also means raising their social status and increasing political demands.

"Those in the middle class might have more demands on social justice and want more say in the social and political sphere. But they are also the major force behind the stability of a society, judging from the experience of developed countries," Xia said.