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China’s newly emerging middle class

Eric Wang pops into a Starbucks near his office in Beijing’s central business district. Wearing a neat dark blue suit with a gold-colored tie, he picks up a cup of cappuccino in his roughened hand, and sips.

“It’s really a sharp contrast between my present life and that of my parents,” says Wang. A certified public accountant (CPA) in the PriceWaterHouse Coopers., he enjoys a life of great vicissitudes.

Born into a rural family in east China’s Zhejiang Province, Wang says his parents are traditional peasants who earn a living by planting rice and fishing in the Lake Tai. Every summer holiday Wang helped his parents on the farm, which left him with a swarthy face and calloused hands.

Wang studied hard in school and was finally admitted to the University of International Business and Economics in Beijing. Fascinated by the capital’s skyscrapers, Wang knew he would not return to the two-storey wooden home where he was born.

Now 29, he earns more than 200,000 yuan (29,000 U.S. dollars) a year by working on initial public offerings for the companies which look to list on the stock exchange.

Considering China reported a per-capita GDP of 2,042 U.S. dollars in 2007, it makes Wang fairly well off. But, he asks not to use his Chinese name, as in China, exposing one’s wealth is not wise.

His parents live the same as they have for decades. While they knew their son works in a foreign-funded accounting firm, they are unaware of how the firm makes money.

Wang lives with his fiancée in a two-bedroom apartment he bought two years ago in downtown Beijing. His mortgage will be paid off in three years. The next goal is a China-made Ford’s Mondeo, worth 200,000 yuan.

“I’m lucky, but others have similar stories,” says Wang. “It’s a trend.”

In developed cities, like Beijing, Shanghai, Guangzhou, and other major metropolitan areas, Wang and his ilk are making a group that has only existed in China since the country’s economic makeover began three decades ago.

Thirty years ago, Wang’s parents lived in a people’s commune, a commune-like organization in which everything was collectively owned by the member peasants. Workers in factories enjoyed cradle-to-grave welfare. Another group, the intellectuals, including professors in colleges and showfolks, were tied in different organizations. The socialist system left no one outside.

Situations changed as China embraced a policy of opening to the outside world and reform in 1978, when national leader Deng Xiaoping and his supporters decided to end the class struggle and turn to economic development.

Zhang Wanli, deputy researcher of the Sociology Institute of the China Academy of Social Sciences (CASS), notes that before 1978 China had three classes – peasants, workers, and intellectuals. Private enterprise was strictly prohibited. A peasant who sold eggs in rural free market would be seen as “the tail of capitalism” that had to be cut off.

Restrictions were gradually lifted from 1978. People could run private enterprises and employ workers. Later, foreign capital came. Thanks to those changes, commercial, financial and services sectors grew rapidly. New jobs, white-collar managers in foreign and domestic enterprises, owners of small and medium-sized enterprises, came into existence. So did professionals, like lawyers and accountants.

Without the restraints of the old system, they gained the freedom of mobility that allowed them acquire economic interests, like entrepreneurship and knowledge, in the budding markets.

“They do brainwork, and they use their cultural capital and professional skills to earn their living,” says Zhang Wanli.

However, the new class has stirred up controversies. Many people believe “middle class” is a lifestyle. They think a middle class family should own at least one apartment and one car, have a golf club membership, and often travel overseas. In other words, it is a lifestyle of the rich.

“I have no car, and I live in a apartment built as work unit accommodation from the CASS,” says Zhang. “But when I was interviewing a millionaire entrepreneur at one time, he said I definitely belong to the middle class.” Zhang says social status and professions, rather than incomes, play more important roles in defining social classes.

In 2001, the CASS conducted a nationwide survey, which found the middle class in terms of profession, including people with new jobs and in non-public sectors, and those government officials and intellectuals in the middle levels, accounted for 20 percent of the total population.

In that survey, elite intellectuals, executives, officials of vice-ministerial level and above, billionaires of private-business owners were divided as the upper class, while industrial workers, business people, and farmers and jobless people the lower classes.

Although people in the middle classes keep increasing in the past seven years, Zhang says its proportion of the population remains approximately the same as more rural people come to the cities to seek work. Considering that rural population account almost 64 percent, it is really a large number.

In 2006, the state-run Outlook Weekly reported the newly emerging strata, including non-public sectors and professional people, accounted for 11.5 percent of the population and contributed almost one third of the total taxes. They also held more than half of the total technical patent rights.

“If the middle class can be quantified by money, I belong to it,” says Eric Wang, “but it makes no sense – I’m only a high-paid worker.”

China’s middle class is trying to find a place in the established political system. However, recent years have witnessed the rise of the middle class’s political status. Intellectuals discuss public policies in the media. Governments and legislatures consult lawyers and accountants on laws and regulations.

Zhang points out that more private entrepreneurs and professionals became delegates to the most recent National Congress of the Communist Party of China in 2007. Considering the increasing economic and social influence of the new social stratum, the Party has made efforts to include them in the political mechanisms.

The year of 2007 saw the implementation of the long-awaited property law, which defined the legal status of private assets, giving individuals the same rights over their property as the state and collectives.

At the end 2007, residents of the scenic coastal city of Xiamen, southeast China’s Fujian Province, protested peacefully against a plan to build an 11-billion-yuan factory producing the industrial chemical paraxylene after a local chemical scientist Zhao Yufen. who is also an academician of China Academy of Sciences identified potential risks later made a proposal to the political advisory body, calling for reconsideration.

After the proposal was published, residents and property owners near the project site worried about the environmental impact, expressing opposition to the project through the Internet, text messages and “walks” at the site. The government later suspended the project and finally relocated it to an area far from Xiamen.

The incident is widely seen as the rising political influence of China’s middle class. The Southern Weekly, a most popular liberal newspaper called it a milestone for the rise of a civil society.

As for the middle class, however, politics is still far from their lives. To Eric Wang, politics only means giving opinions to accounting regulators via his boss. When the government regulators want to issue or amend regulations on accounting, “my boss will be consulted,” he says.

But Wang himself wants more. “Someday when I earn more economic power, I think the middle class as whole may expect higher political status,” he says.

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