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The New Myth in China: China’s Rising Middle Class Will Speed Up Democratization

Abstract: The Building of Political Democracy in China, a white paper issued by the Chinese regime in October 2005, amply expresses that the regime has instituted what it calls, “democracy with Chinese characteristics,” a form that actually resists Western democracy.[2] For those who are optimistic about the prospects of democracy in China, the emerging middle class in China will not be the force to propel China toward Western democracy.

In the past few years people both inside and outside of China have enthusiastically discussed the rapid growth of the Chinese middle class. The expectation has been that this new class would speed up the democratization process in China. An authoritative research report from the Chinese Academy of Social Sciences (CASS) simply claims that an “onion-shaped social structure” has taken place in China. It refers to a structure with the two small ends being the rich and the poor, with the middle class being the majority of the population. Currently all the democratic countries in Europe and North America have this type of onion-shaped social structure.

The purpose of these official scholars inside China, however, was not to study the emerging middle class itself. It was instead to provide “proof” that China is improving itself politically, and moving closer toward the social structure of a democratic country. Some “China experts” outside of China may also favor this theory. Their purpose is to justify praise for the Chinese regime. It is just like some overseas scholars and observers to try to prove that China is moving toward democracy by referring to the regime’s recently published white paper, “The Building of Political Democracy in China,” despite the facts that the white paper clearly states that China’s democracy is “a socialist democracy with Chinese characteristics,” totally different from Western-style democracy; and that political participation and human rights still fall short in Chinese people’s daily lives.

1. How Large Is the Middle Class in China?

The focal point of this debate on the middle class is how many middle-class people China really has. The following are some of the recent studies on this issue:

In my article written in 2000, I developed two criteria to separate social classes: economic income and professional acknowledgement .[3] Quoting data from the China Statistical Yearbook, using criteria to evaluate the income level and professional acknowledgement, I estimated that the upper-class level constitutes 4 percent of China’s population; the middle class counts for 11 percent; and the lower class including marginalized groups counts for about 85 percent.{mospagebreak}

In 2004, the CASS Sociology Research Institute developed four standards to determine population in the middle class: 1. profession; 2. income; 3. expenditure and life style; and 4. self-identification.[4] The report explained that expenditure and life style (3) depends on one’s economic income. Also, self-identification [4] is determined by one’s income and professional acknowledgement. Therefore, the core criteria are still two-fold. They are economic income and profession acknowledgement. This research report concluded that the middle class in China was growing rapidly and consisted of about 15 percent of the Chinese population. BNP Paribas Peregrine painted a more optimistic picture. This report suggested that, in 2002, there were around 50 million middle-class families in China, with an average annual income of 75,000 yuan (about US$9,375/year/family) and average assets of 310,000 yuan (about US$38,750/family). The report further predicted that by 2010, all the above numbers would double, suggesting that there will then be 100 million families that meet the standards of middle-class families, with an average family income of 150,000 yuan (about US$18,750/year/family) and average family assets of 620,000 yuan (about US$77,500).

With an estimated four members in each Chinese family, 50 million middle-class families count for a group of 200 million people, which is about 18 percent of China’s population. Merrill-Lynch goes further than BNP Paribas Peregrine to estimate that within 10 years, the number of China’s middle-class people will reach 350 million (32 percent). However, this prediction garnered a lot of sarcastic comments among Chinese Internet forums, which claimed that the number was not at all realistic.

2. Social Class vs. Occupation

In the last two years, the Chinese authorities have intensely promoted the Research Reports on the Social Structure in Modern China. In these reports, using the criteria “grouping on the basis of occupation and then on their organizational, economic, and cultural resources,”[5] Lu Xueyi and his team from the National Academy of Social Science categorized Chinese society into 10 social classes:[6]

1. Ruling authorities and/or social leaders
2. Managerial personnel
3. Entrepreneurs
4. Technical professionals
5. Administrative staff
6. Private business owners
7. Store associates
8. Factory workers
9. Farm laborers
10. Part-time workers and unemployed{mospagebreak}

The biggest shortcoming of this report is that it is simplistically using occupation as the criteria to classify social strata. It fails to take into account the fact that there is a big economic pay differential in every profession. Indeed, there are huge differences in social status in any of these given classes, depending on the position one holds. For example, category 1 alone consists of national leaders like Hu Jintao, officials at the provincial, city, county or town levels, office managers and administrative staff members. They are simply incomparable in income level and in the associated social prestige.

Then there are articles that discuss the 10 characteristics of the middle class, but they are nothing but jokes. For instance, the life style of the middle class must consist of a rich night life including going to nightclubs, playing mahjong, having business conversations, listening to music and so on. One must also hold a foreign-country residency or have lived in a foreign country for at least three years, must naturally shun fashionable culture but be highly attracted to ancient culture and very knowledgeable in antiques. One must also be familiar with etiquette, exhibiting the American style while admiring the European style and freely mixing foreign language during conversations…and so on.

3. Pyramid Social Structure

We cannot ignore the reality of a country’s social and economic development while defining the criteria of the middle class, nor can we arbitrarily alter the standard of what constitutes a middle class in order to paint a better national image for the world. According to data from the World Bank (2000), the gross national product of China is less than three-fifths of the average gross national product of all nations and it is equal to only 14 percent of the gross national product of the developed countries. Under these circumstances, the structure of Chinese society cannot be like an onion in shape, in which the largest percentage of the population is at the middle level. According to the economic, social development, and real purchasing power, the per capita annual income for the middle class should be between US$10,000 and 50,000, which is equivalent to 80,000 to 400,000 yuan. Only when China obtains that level of per capita income, will China’s middle class hold the “corresponding consumption capability” and fulfill a certain level of “quality of life.” Only when that happens can we truly claim that we are in conformance with the definition of middle class. Otherwise, the middle class is just another name for “escaping poverty” or “just making it.”

At present, the educational level of the urban population is low and there are more blue-collar workers than white-collar workers. The Gini coefficient is 0.45 in China, which is way over the Western countries’ level of 0.3[7]. With the available data, my analysis is that the middle class in China including the upper middle class totals about 15-16 percent of the population. The research report, by Prof. Li Qiang at Tsinghua University, which is based on 2003 survey data, concluded that the socio-economic structure of cities in China is more of a pyramid-shape structure with 55.3 percent of the population at the bottom level, 26.5 percent at the middle level and 18.2 percent at the upper level. However, the structure of the farming countryside is an upside-down T shape in which 97.6 percent of the population is at the bottom level.{mospagebreak}

This report is by far the best research report on China’s social structure.

4. Is Middle Class the Driving Force of China’s Democratization?

In fact, size alone cannot be considered the critical reason that the middle class in China will promote democratization. Even if there were a large middle-class population, as long as they do not have the right to voice their opinions, to free assembly, or to form a social pressure group, they would be incapable of participating in society’s public affairs. If they don’t even have a reliable mechanism to guarantee their own rights, how can they facilitate China’s democratization?

Two preconditions will have to be met for a newly emerging middle class to become the driving force of China’s democratization:

1) The middle class will have to be the mainstream force for social stability. First of all, the emergence of a middle class indicates the complete dismantlement of China’s traditional agricultural society, and is a structural element that pushes social structure to change from a pyramid shape to an onion shape. Secondly, the middle class is the buffer class between the high and low ends of society and is an important political factor for social stability. Thirdly, the middle-class population represents a mild, conservative mindset in society. When they take the lead, their mindset guarantees social stability. The second and the third elements can be interpreted in common language as: The society is not stable when there are too many poor people. When the middle class is weak and poorly organized, a country is divided into two classes: the poor and the rich. As the poor and the rich are natural enemies, they reject each other in politics. It is hard for them to compromise with each other, which in turn leads to social instability. Fourthly, the middle class’s income is stable and demonstrates the characteristics of strength. The effect then will be an obvious tendency to effectively promote a steady growth in demand, which is a fundamental economic factor for social stability in a country. I also share the same view.

2) Chinese scholars interpret the middle-class’s positive effect based on the historical experience of England’s “glorious revolution.” They think that the reason that the glorious revolution of England’s constitutional monarchy was successful was completely attributed to the force of the newly developed capitalist class. Therefore, they assume that once China’s middle class becomes strong, they will fight for the interest of their class and force the leaders of the country to make political concession and practice democracy.

The aforementioned theories all have good rationale. However, two preconditions for the assumption are missing. First, does China’s newly developed middle class have the rights to take part in public affairs in society? In other words, are their rights to assemble and advocate for their interests protected by law? Second, what is the political attitude of China’s middle class?{mospagebreak}

5. Possibility of Forming Non-Government Organizations (NGOs) in China

After I lived in the United States for a few years, I realized that the stability of the U.S. society doesn’t just come from the existence of the large-scale middle class. It also comes from the fact that every social class has the rights and channels to express their own opinions. Even the poor people have opportunities to express themselves, and fight for their rights.

No one can deny this fact, no matter how he wants to defend the Chinese social system, that in China, the lowest rung on the socioeconomic ladder, which accounts for over 80 percent of the population, has no say, no rights, and no channels to express their opinions. The so-called appeals system has failed miserably. The existence of an Appealing Village in Beijing[8] is proof of this failure that cannot be neglected anymore.

The remaining question is whether the middle-class people in China are able to express themselves freely? Unfortunately, the answer is NO. When it comes to political participation in decision-making, they are just like the poor. There is no systematic channel for them to voice different opinions. Some of them may write a few essays in newspapers and magazines to mildly criticize some social problems, without touching political leaders.

According to incomplete statistics by the NGO Research Center, Tsinghua University, there are about three million NGOs in China today. However, except for a few specialized technical associations, the vast majority of NGOs in China have close ties to government agencies, or are directly supported financially by the government. These include the Women’s Federation, the Disable Person’s Federation, and all kinds of professional associations affiliated with government agencies. These so-called “mass or non-government associations under the leadership of the Party,” simply don’t meet the definition of NGOs.

Individuals in the middle class, without a non-government association representing the interests of people in their own profession as a systematic form to protect their rights, will be extremely weak when they have to face the communist government.

6. What Exactly Is the New Middle Class’s Political Attitude in China?

The Chinese middle class is the beneficiary of economic reform and the current political order. The main body of the middle class is still the Chinese Communist Party staff and government agencies. They are not only the defenders of the current political system but also the beneficiaries of the system. People in the education profession, especially those in colleges and universities, are the biggest beneficiaries of education reform. People in the health and medical field are also beneficiaries of the commercialization of healthcare.{mospagebreak}

The Chinese academic field has been placing their greatest hope for social reformation on the class of private business owners. However, considering how business owners survive in China, one can easily see that they have developed a symbiotic relationship where their interests depend of the political elite. For many of them, instead of accumulating wealth through market competition, they become rich as a result of favors bestowed by regime officials. The officials who have the power to allot formally national or collectively owned resources have become the ones to “create the rich.” The white-collar and high-tech elites who work in foreign enterprises regard “staying away from politics” as their core value. They are only interested in becoming rich and having fun, and do not want to endanger the very source of their income.

In short, the mainstream of China’s current middle class prefers stability over democratic reforms.

Translated by CHINASCOPE 

He Qinglian, born in Hunan Province in 1956, is the author of The Pitfalls of Modernization, a hard-hitting expose of corruption and the seamier side of China’s economic reform. Not only was it a national best-seller but it became state-sanctioned reading for China’s leaders as they struggled with corruption, bad banks, and unemployment.

[1] Reserved.
[3] “A General Analysis on the Changes of China’s Current Social Structures”
[4] See “An Analysis and Estimate of China’s Social Structures”
[5] “Research Report on The Current Socio-Economic Structure of China,” published in 2003
[6] See also, “Understandings about the Social Structure in Modern China,” Chinascope, October 2005, page 46.
[7] From Wikipedia: The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income). The Gini index is the Gini coefficient expressed in percentage form, and is equal to the Gini coefficient multiplied by 100.
[8] An entire village has developed consisting of people waiting for months and even years for their “appeal” to be heard.