China’s middle-income population passes 500 million mark, state-owned newspaper says - Independent News

by Mandy Zuo at scmp.com

China’s middle-income population has passed the 500 million mark, according to a commentary in a state-owned newspaper published on Sunday.

The country is currently trying to boost domestic consumption and the front-page article in Economic Daily – published under the byline Zhao Caiwen, a pen name linked to the Communist Party’s Central Financial and Economic Affairs Commission – said the buying power of this group, along with urbanisation and technological innovation, will be major forces driving China in the future.

It was published as part of a series billed as “how China is going to maintain relatively fast long-term growth” in an apparent effort to lift market confidence in the world’s second biggest economy amid faltering growth.

In a reference to the American economist Walt Rostow’s stages of growth theory, the article said China is “in what Rostow calls a stage of high mass consumption, and the Chinese market has huge development potential and global appeal”.

The previous official estimate had put the total middle-income population at 400 million as of 2019, but the article did not provide a source for the 500 million figure and there is no official definition for what constitutes this group.

The authorities are counting on the spending power of China’s 1.4 billion people to drive economic growth following the property market crisis and a fall in external demand.

Last month, the vice-minister of commerce Sheng Qiuping said the government would announce a series of measures to boost consumption by encouraging consumers to renovate their homes and upgrade their household appliances, furnishings and cars.

The most recent incentives of this sort were unveiled in Shanghai over the weekend, when the authorities announced subsidies of up to 10,000 yuan (US$1,389) for buying new cars and 1,000 yuan for home appliances.