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Overview
The contributors, from diverse disciplines and different regions, examine the development and evolution of China's middle class from a variety of analytical perspectives. What is its educational and occupational makeup? Are its members united by a common identity—by a shared political vision and worldview? How does the Chinese middle class compare with its counterparts in other countries? The contributors shed light on these and many other issues pertaining to the rapid rise of the middle class in the Middle Kingdom.
Contributors: Jie Chen (Old Dominion University), Deborah Davis (Yale University), Bruce J. Dickson (George Washington University), Geoffrey Gertz (Brookings), Han Sang-Jin (Seoul National University), Hsin-Huang Michael Hsiao (National Taiwan University), Homi Kharas (Brookings), Li Chunling (Chinese Academy of Social Sciences), Jing Lin (University of Maryland–College Park), Sida Liu (University of Wisconsin– Madison), Lu Hanlong (Shanghai Academy of Social Sciences), Joyce Yanyun Man (Peking University–Lincoln Center), Ethan Michelson (Indiana University–Bloomington), Qin Chen (Hohai University), Xiaoyan Sun (Beijing Foreign Studies University), Luigi Tomba (Australian National University), Jianying Wang (Yale University), and Zhou Xiaohong (Nanjing University).
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Product Details
| ISBN-13: | 9780815704058 |
|---|---|
| Publisher: | Rowman & Littlefield Publishers, Inc. |
| Publication date: | 11/15/2010 |
| Pages: | 396 |
| Product dimensions: | 6.00(w) x 9.00(h) x 1.10(d) |
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Read an Excerpt
China's Emerging Middle Class
BEYOND ECONOMIC TRANSFORMATIONBROOKINGS INSTITUTION PRESS
Copyright © 2010 THE BROOKINGS INSTITUTIONAll right reserved.
ISBN: 978-0-8157-0405-8
Chapter One
Introduction: the rise of the Middle Class in the Middle KingdomCHENG LI
Among the many forces shaping China's course of development, arguably none will prove more significant in the long run than the rapid emergence and explosive growth of the Chinese middle class. China's ongoing economic transition from a relatively poor, developing nation to a middle-class country has been one of the most fascinating human dramas of our time. Never in history have so many people made so much economic progress in one or two generations. Just twenty years ago a distinct socioeconomic middle class was virtually nonexistent in the People's Republic of China (PRC), but today a large number of Chinese citizens, especially in coastal cities, own private property and personal automobiles, have growing financial assets, and are able to take vacations abroad and send their children overseas for school. This transformation is likely to have wide-ranging implications for every aspect of Chinese life, especially the country's long-term economic prospects, energy consumption, and environmental well-being.
The importance of China's emerging middle class, of course, extends far beyond the realm of economics. This volume focuses on the sociopolitical ramifications of the birth and growth of the Chinese middle class over the past two decades. The central question is: What impacts, current and future, might China's emerging middle class have on the country's social structure and political system? Following this broad line of inquiry, the volume sets itself four tasks:
—To examine the status of research on social stratification and social mobility in China
—To identify the major issues and trends related to the Chinese middle class
—To compare the Chinese middle class with its counterparts in other countries
—And to assess the values, worldviews, and potential political roles of the Chinese middle class as well as its likely impact on China's rise on the world stage.
This introductory chapter provides an overview of the political significance and historical background of the emerging Chinese middle class and summarizes the existing literature and ongoing debates on the topic.
The Sociopolitical Significance of a Chinese Middle Class
Early studies of newly affluent groups in China, including the nascent middle class, tend to emphasize the status quo–oriented, risk-averse nature of these prime beneficiaries of economic reform. However, more recent studies (including many by PRC scholars) suggest that this may simply be a transitory phase in the development of the middle class. There already appears to be widespread resentment among the middle class toward official corruption and the state's monopoly over major industries. Another potential source of sociopolitical ferment lies in the increasing number of college graduates, many of whom belong to middle-class families, who are unable to find work. An economic downturn, led by the collapse of the real estate market or the stock market—two institutions that have contributed enormously to the rapid expansion of the Chinese middle class—will only heighten the middle class's sense of grievance. Furthermore, the middle class is central to China's new development strategy, which seeks to reorient China's economy from one overly dependent on exports to one driven by domestic demand. The increasing economic role of the middle class may in turn enhance the group's political influence.
China's emerging middle class is, of course, a complex mosaic of groups and individuals. Subsets of the middle class differ enormously from each other. In terms of the class's occupational and sociological composition, its members fall into three major clusters:
—An economic cluster (including private sector entrepreneurs, urban small businesspeople, rural industrialists and rich farmers, foreign and domestic joint-venture employees, and stock and real estate speculators)
—A political cluster (government officials, office clerks, state sector managers, and lawyers)
—A cultural and educational cluster (academics and educators, media personalities, public intellectuals, and think tank scholars).
There is a tendency, sometimes, to assume that the relationship between China's middle class and its authoritarian state is one of simple, one-dimensional co-optation, but this is to oversimplify. Undoubtedly some members of the class are the clients of political patrons, but many more are self-made people. Indeed, such an economically aspirant population is a double-edged sword for the Chinese authorities. They are well aware of the fact that the middle class has pushed for democratization in other developing countries (South Korea, Indonesia, and Brazil, among others).
It is also noteworthy that the emergence of the middle class in China parallels the reemergence of the Middle Kingdom on the global stage. To a certain extent, the Chinese middle class has already begun to change the way China engages with the international community, both by playing an active role in this increasingly interdependent world and by keeping abreast of transnational cultural currents. As the PRC's international influence continues to grow, two contending views on how China might understand its role in the world have taken shape. They reflect fundamentally different visions of China's future, and neither can be divorced from the trajectory of its emerging middle class.
In the first, a nightmare scenario, a superpower China, buoyed by decades of double-digit economic growth and military modernization, has birthed a middle class of unprecedented size and scope, whose strongly mercantilist views govern almost all affairs of state. The aggregate demand of hundreds of millions of middle-class consumers, coupled with increasingly severe global resource scarcity and growing international consternation at China's swelling carbon footprint, has led nativist demagogues to peddle a toxic strain of nationalism to the broader populace. In this scenario, an ascendant and arrogant China, still smarting from the "century of humiliation" it endured at the hands of Western imperialists over a century earlier, disregards international norms, disrupts global institutions, and even flirts with bellicose expansionism.
In the second view, China's burgeoning middle class increasingly embraces cosmopolitan values, having forged close economic and cultural links with Western countries, and especially the United States. In this scenario, China's middle-class lifestyle closely mirrors that of the West, and an increasing percentage of China's political and cultural elites have received some Western education. The Chinese middle class has acquired a sophisticated understanding of the outside world, recognizes the virtue of cooperation, and demands that China act as a responsible stakeholder on the world stage. The expectation underwriting this scenario is that if China continues to "evolve peacefully" in the direction of openness and integration, it may experience an eventual democratic breakthrough. If this were to occur, then the time-honored theory of a "democratic peace" would finally be put to the test in a world of great powers integrating ever more closely.
The significance of China's emerging middle class, therefore, lies not only in the economic domain or in its potential to effect domestic politics but also in its ability to shape China's international behavior. A better informed and more comprehensive understanding of the Chinese middle class, from its basic composition to its values and worldviews—from its idiosyncratic characteristics to its evolving political roles in China—will help to broaden the policy options available to the United States and other countries in dealing with this emerging global power. In a broader sense, this study will contribute to the ongoing debate over the Chinese middle class, that is, whether or not it will become a catalyst for political democratization within China and lead to a constructive Chinese presence in a rapidly changing global environment.
China's Middle Class: Fast Ascendance amid Slow Acceptance
Despite the great importance of the subject, scholarly communities outside China have been remarkably slow to accept the notion that the Chinese middle class has become a distinct sociopolitical force. China watchers around the world are nearly unanimous in recognizing the country's rapid economic growth over the past three decades: China's GDP has grown at a pace of roughly 10 percent a year, the average Chinese person's income has quadrupled, about 300 million people have been lifted out of poverty, and a significant portion of the population has become affluent. Yet the use of the term Chinese middle class remains controversial. With a few notable exceptions, Western scholars are hesitant to acknowledge the existence of a Chinese middle class, let alone explore its political implications.
There are various reasons for this dearth of Western scholarship on the Chinese middle class. The most notable include the difficulty that foreign researchers have in obtaining extensive empirical data on the issue, cultural differences in conceptualizing the idea of a middle class in the Chinese context, and reluctance on the part of Western analysts to accept the fact that Communist China could produce a middle class similar to those found in the West. This skepticism is not wholly without justification: the nascent Chinese middle class is admittedly a very new phenomenon.
A Foreign Concept and a Nascent Phenomenon
The term middle class was rarely used during the first four decades of the PRC. Even in the pre-Communist era, it was largely a foreign concept. According to the late John King Fairbank, capitalism did not grow in earnest in China during the late nineteenth and early twentieth centuries because China's merchant class failed to coalesce into an independent entrepreneurial power outside the "control of the gentry and their representatives in the bureaucracy." Without firsthand experience, the concept of a middle class remained foreign to the Chinese.
This state of affairs changed very little after the establishment of the PRC in 1949. The few groups considered part of the middle class in pre-1949 China—namely, the private entrepreneurs and petty-bourgeois intellectuals who had emerged in preceding decades—either quickly disappeared or were severely curtailed, both politically and economically, after the Communist revolution. Indeed, by the mid-1950s the 4 million private firms and small businesses that had existed in China before 1949 had been systematically dismantled. Maoist ideology dictated that the country had only three social strata (workers, peasants, and intellectuals), and the Marxist notion of intellectuals as an "intermediate stratum" bore little resemblance to the Western concept of the middle class.
Only after Deng Xiaoping instituted reform and opening did the term middle class begin to appear in Chinese academic writings. The earliest references to the concept were made in the late 1980s, when scholars began to examine the sudden emergence of rural industrialists—owners of township and village enterprises in the countryside—and the arrival of private entrepreneurs in the cities. At that time, the consensus among Chinese scholars was that the concept of the middle class should not be employed to describe these groups, in large part because many of these rural industrialists and urban entrepreneurs came from underprivileged or uneducated social strata.
Only since the turn of the millennium has research on the middle class found its way into the PRC's intellectual mainstream. It should be noted that in the early phase of research on this concept Chinese scholars often used the terms middle stratum (zhongjianceng), middle-income stratum (zhongjian shouru jieceng), and middle-income group (zhongdeng shou ru qunti), rather than middle class (zhongchan jieji) to refer to this new socioeconomic force. The increasing use of these new terms among PRC scholars over the past decade reflects the profound changes that have occurred in domestic social stratification and social mobility. In addition to the aforementioned rapid development of rural industries and urban private enterprises, numerous other important developments have led to the meteoric rise of the middle class in China. These include the boom in foreign joint ventures, the adoption of a stock market in Shenzhen and Shanghai, urban housing reforms and large-scale urbanization, an enormous expansion of higher education, constitutional changes regarding property rights, and the increasingly cosmopolitan lifestyles created by economic globalization and international cultural exchanges.
Two factors, however, have been particularly instrumental in increasing both public awareness of and scholarly interest in China's middle class. The first is the Chinese business community's drive to promote the image of Chinese consumers as potentially the "world's largest middle-class market"; the second is the Chinese government's decision to "enlarge the size of the middle-income group."
The Business Community's Drive for the "World's Largest Middle-Class Market"
The business community in China, including both domestic and foreign companies, has an interest in promoting the notion of a Chinese middle class. The idea of an extant middle class in China has often been the primary driver of foreign investment and other business activities in the country. It has been widely noted that China's savings rate is one of the highest in the world. In 2008, for instance, Chinese households saved approximately 40 percent their disposable income. That same year, American households saved only 3 percent of their disposable income. While private consumption comprised an average of 59 percent of GDP globally and 72 percent of U.S. GDP in 2006, China's private consumption made up only 38 percent of its aggregate GDP. The possibility of stimulating domestic consumption in China, the world's most populous country, has understandably captured the imagination of the business community.
The business community recognized very early on that popularizing the idea of a middle class in China would redound to the benefit of their sales figures. As Li Chunling, a sociologist at the Chinese Academy of Social Sciences (CASS) and a contributor to this volume, has observed, it was the business community in China, including manufacturers, company managers, service providers, and their associates in the media, that initially turned the idea of a Chinese middle class from an abstract academic subject to a hot topic throughout society. While most Western social scientists, including academic economists, have been generally dismissive of the idea of a Chinese middle class in the last decade, business leaders and analysts have conducted a substantial number of research projects on the topic. For firms operating in China—including multinational, foreign-owned, and Chinese state-owned, private and joint ventures—this research has helped them to understand the middle class's overall size, consumption patterns, generational composition, and geographical distribution. To the extent that they publicize the middleclass lifestyle, they are also helpful in shaping and promoting the group's continued expansion.
Over the past decade the Chinese media have obsessed over commercial indicators of middle-class growth. One such indicator is the rapid increase in credit card use. In 2003, 3 million credit cards were issued; by the end of 2008 a total of 150 million credit cards were in circulation, 50 million of which were issued in that year alone. Another indicator is the stunning increase in the number of private autos in the country, from some 240,000 in 1990 to about 26 million in 2009. In 2009 China's auto production output and sales volume reached 13.8 million and 13.6 million, respectively, making the PRC the world's leading automobile producer and consumer for the first time.
A variety of companies, especially large multinational banks and consulting firms, have commissioned studies to assess the current size and projected growth of the Chinese middle class. In 2004 the French investment bank BNP Paribas Peregrine predicted that China's middle class would increase from 50 million households that year (13.5 percent of the Chinese population) to 100 million households by 2010. Two years later, Merrill Lynch projected that China's middle class would consist of a total of 350 million people by 2016, constituting 32 percent of the adult population. That same year, the McKinsey Global Institute made an even bolder prediction: China would have a total of 100 million middle-class households by 2009, which would account for 45 percent of the country's urban population. According to McKinsey's projections, the middle class would reach 520 million individuals (or even 612 million if "lower aspirants" are included) by 2025, accounting for 76 percent of the urban population. According to these estimates China will have the world's largest middle class within fifteen years. Another study, jointly conducted by the Hong Kong Shanghai Banking Corporation (HSBC) and MasterCard in 2007, reached a conclusion more in line with BNP Paribas Peregrine, forecasting a total of 100 million middleclass households by 2016.
(Continues...)
Excerpted from China's Emerging Middle Class Copyright © 2010 by THE BROOKINGS INSTITUTION. Excerpted by permission of BROOKINGS INSTITUTION PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Contents
Foreword Kenneth Lieberthal....................xiAcknowledgments....................xv
1 Introduction: The Rise of the Middle Class in the Middle Kingdom Cheng Li....................3
2 The New Global Middle Class: A Crossover from West to East Homi Kharas and Geoffrey Gertz....................32
3 Chinese Scholarship on the Middle Class: From Social Stratification to Political Potential Cheng Li....................55
4 Globalization, Social Transformation, and the Construction of China's Middle Class Zhou Xiaohong and Qin Chen....................84
5 The Chinese Middle Class and Xiaokang Society Lu Hanlong....................104
6 Characterizing China's Middle Class: Heterogeneous Composition and Multiple Identities Li Chunling....................135
7 China's New Upper Middle Classes: The Importance of Occupational Disaggregation Jianying Wang and Deborah Davis....................157
8 China's Housing Reform and Emerging Middle Class Joyce Yanyun Man....................179
9 The Housing Effect: The Making of China's Social Distinctions Luigi Tomba....................193
10 Higher Education Expansion and China's Middle Class Jing Lin and Xiaoyan Sun....................217
11 Placing China's Middle Class in the Asia-Pacific Context Hsin-Huang Michael Hsiao....................245
12 Middle-Class Grassroots Identity and Participation in Citizen Initiatives, China and South Korea Han Sang-Jin....................264
13 China's Cooperative Capitalists: The Business End of the Middle Class Bruce J. Dickson....................291
14 What Do Chinese Lawyers Want? Political Values and Legal Practice Ethan Michelson and Sida Liu....................310
15 Attitudes toward Democracy and the Political Behavior of China's Middle Class Jie Chen....................334
Bibliography....................359
Contributors....................373
Index....................381