From France24, October 16:
An ever-growing middle class has been emblematic of China’s ascent ever since Deng Xiaoping kicked off the country’s economic transformation in the 1980s. That progress now risks being reversed as millions of people in China face rising living costs, fierce professional competition, a real estate bubble and sluggish growth.
Chinese President Xi Jinping opened the 20th Communist Party Congress on Sunday, during which he is expected to become the first leader since Mao Zedong to be handed a third term. Xi has made his “Chinese Dream” of a flourishing middle class central to his vision for the country. However, economic headwinds are buffeting China’s vast bourgeoisie – posing a new challenge for Xi.
Xi can cite a strong record as he looks back on his first decade in power. Millions more Chinese have been lifted out of poverty, benefitting from 6 percent average annual growth. It is estimated that between 350 and 700 million people belong to the middle class – compared to about 15 million at the beginning of the century.
“China has been profoundly transformed at great speed,” said Jean-Louis Rocca, a sinologist at Paris’s Sciences-Po University specialising in the Chinese middle class. “In just a few years, hundreds of millions of Chinese have become the first in their families to go to university and then get well-paid jobs, and consumption patterns have changed accordingly.”
‘Declining quality of life’However, the Chinese Dream now appears to be slipping away. The Chinese economy grew by just 0.4 percent year-on-year in the second quarter, a marked slowdown from China’s robust growth after its early success in managing the pandemic.Xi’s interventionist economic policies have prioritised China’s strict “zero-Covid” strategy over growth while clamping down on tech titans like Alibaba and the Tencent conglomerate. Meanwhile, the trade war with the United States has heated up, with the US Commerce Department imposing sweeping new restrictions on exports of semiconductor technology to China on October 7.
“Incomes are no longer rising while the cost of living is increasing by leaps and bounds,” Rocca said. “And there is a lot of social pressure. To be considered 'successful,' you’ve got to be able to live in such and such a neighbourhood; send your children to such and such a school; wear clothes from this brand; and own that make of car.”
Health costs are soaring as well, as Chinese society is ageing rapidly. “People are feeling a decline in their quality of life,” said Rocca.
But expectations are still rising – notably for China’s youth – creating a glut of highly educated people vying for the same positions.
“Never before have so many people graduated from university, but not all of them get a job after graduating,” Rocca noted. “Unemployment among well-qualified young people is at nearly 20 percent. Some are accepting low-paid jobs as the 'least-bad' option – and they’re seeing the successful life society tells them to have slipping away.”
From ‘lying down’ to ‘let it rot’China’s property market further exemplifies the fading of the Chinese Dream. “If there’s one symbol of fulfilled aspiration in China, it’s owning a home,” Rocca said. On the surface, the situation looks good: 87 percent of households own their own property, and 20 percent own several. But the situation is bleak for young people, many of whom find it virtually impossible to afford their own homes. Rampant land speculation has caused prices to soar, creating a property bubble looming over the economy. Rents have become prohibitively expensive, especially in the biggest cities like Shanghai and Beijing.In this context, many young people have decided to lower their ambitions: The term “tang ping” (lying flat) has been making the rounds on social media in recent months – the idea being to opt out of pursuing success in favour of adopting a simpler lifestyle:....
....MUCH MORE
Growth going forward, and it will no longer be the 8% - 12% that raised 800 million people out of poverty since 1980, growth going forward will be directed toward the lowest income deciles to equalize the power of the smaller cities and towns versus the mega-cities
And the growth will be in the 4% - 6% range.
Earlier:
