top of page
  • InduQin

China’s Middle Class – Growth, Policy, and Consumption


The growth of the middle class in China has presented a host of new opportunities for global businesses seeking to capitalize on the group’s rising purchasing power. As incomes have risen, so has demand for consumer goods, as people are more able and willing to spend on things such as cars, housing, education, healthcare, and travel. The middle class is therefore also becoming an important means for China to achieve a higher degree of economic self-sufficiency by leveraging domestic demand for goods and services.


However, as China’s middle class grows, it also faces new challenges and pressures. Income inequality, regional disparities, and rising living costs present obstacles to raising more people to the middle-income bracket, and addressing these issues is becoming a top priority for the government.

Defining China’s “middle class”

The middle class in China, or alternatively middle-income groups, has been defined in a number of different ways over the years. The most common definition currently seen in China is the scope set by the National Bureau of Statistics (NBS), which defines the “middle-income group” as a typical three-person household that earns between RMB 100,000 to RMB 500,000 (approx. US$14,844 to US$74,221 in 2022) per year.


An oft-quoted figure for the size of China’s middle class comes from the former Director of the NBS, Ning Jizhe, who, using the above definition, has stated that China’s middle-income group surpassed 400 million people in 2017, or 140 million households.


This figure continues to be used in communications and reports from China’s state media, but no up-to-date statistics have been released directly from government institutions since then.


According to the Hurun 2018 China New Middle-Class Report, there were over 33.2 million middle-class households as of August 2018. The “middle class” is defined by Hurun as “Urban residents with an annual household income of more than RMB 300,000 (approx US$42,647) in first-tier cities [Beijing, Shanghai, Guangzhou, and Shenzhen] and more than RMB 200,000 (approx. US$28,431) in new first-tier cities [such as Chengdu, Hangzhou, Chongqing, Wuhan, Xi’an, Suzhou, and Tianjin] and other cities.”


Among them, Beijing is the city with the most middle-class families, followed by Shanghai, while Guangdong was the province with the most middle-class families. These three regions had a total of 16.6 million middle-class families, accounting for 50.08 percent of the whole of the Chinese mainland.


Meanwhile, data from the NBS shows the distribution of disposable income per capita across the three middle population quintiles (from lower-middle income to upper-middle income households) ranged from RMB 19,303 (approx. US$2,744) to RMB 47,397 (approx. US$6,738) in 2022.

Spending power in China

China’s median disposable income per capita reached RMB 31,370 in 2022, a year-year-on-year increase of 4.7 percent. This figure has more than doubled from the RMB 15,632 recorded in 2013.

In urban areas, the median disposable income per capita reached RMB 45,123 in 2022, up 3.7 percent year-on-year, while in rural areas it reached RMB 17,734, up 4.9 percent year-on-year.

The two years that were the worst hit by the pandemic in China – 2020 and 2022 – both recorded a significant deceleration in the growth of disposable income per capita. However, these dips correspond with slowdowns in GDP growth in those years, and with China’s GDP projected to rebound to 5.2 percent growth according to IMF projections, it is to be expected that growth in income will follow suit.

Read More at https://www.china-briefing.com/news/china-middle-class-growth-policy-and-consumption/

13 views0 comments
bottom of page