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China's Middle Class is Booming
Daily Policy Digest

International Issues

Thursday, January 24, 2002
The People's Republic of China is in the midst of a middle class boom -- even though the ruling communist party still will not use the term in its official documents, opting instead for "middle stratum." But while the changes could have a big impact on business, it doesn't automatically follow that political freedom will come in their wake.

  • Some western observers believe China's accession last month to the World Trade Organization (WTO) will make the country more prosperous and boost development of a middle class.
  • The legitimacy of private enterprise was officially recognized in the country's constitution three years ago, and President Jiang Zemin caused a furor in the communist party last July when he suggested entrepreneurs be officially allowed to join.
  • While the middle class now is only about 15 percent -- as opposed to 60 percent in the U.S. -- that still totals about 110 million people.
  • The middle class could total 200 million by 2005 -- explaining why the foreign business community is salivating over the promises made by China to open its markets after entering the WTO.
Whether a rising middle class will also demand political reforms, however, is another question. While a study by the communist party's powerful Central Organization Department said a politically active middle class would have a "profound impact on social and political life," there's currently scant evidence the middle class is seeking anything more than economic and political security.

China scholars point out that South Korea and Taiwan maintained their authoritarian regimes for decades of rapid economic growth and despite the emergence of a big middle class; but both nations have politically liberalized in recent years.

Source: "To Get Rich Is Glorious," Economist, January 19, 2002.

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