This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-22949602
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
Version 0 | Version 1 |
---|---|
Can China's middle class spend the world out of recession? | Can China's middle class spend the world out of recession? |
(about 4 hours later) | |
Meet the Zhangs, one of China's new middle-class families who some economists believe are going to spend their way to a revival of the global economy. | |
Zhang Dongyang runs his own construction company in Zhengzhou, one of China's fastest growing cities. | Zhang Dongyang runs his own construction company in Zhengzhou, one of China's fastest growing cities. |
His wife, Zhang Min, is a hospital administrator, and together they earn about $40,000 (£25,000) a year. | His wife, Zhang Min, is a hospital administrator, and together they earn about $40,000 (£25,000) a year. |
They own their own apartment, mortgage free, drive a Japanese-made Lexus car and will, they say, soon start taking not one, but two holidays a year. | They own their own apartment, mortgage free, drive a Japanese-made Lexus car and will, they say, soon start taking not one, but two holidays a year. |
Their six-year-old son, Zhang Zhiye, attends a private school. | Their six-year-old son, Zhang Zhiye, attends a private school. |
"Yes I do feel middle class," Mr Zhang tells me, adding that it's now become acceptable to admit it. | "Yes I do feel middle class," Mr Zhang tells me, adding that it's now become acceptable to admit it. |
"People who are more capable rise to the top. This is natural. It is the survival of the fittest." | "People who are more capable rise to the top. This is natural. It is the survival of the fittest." |
Of course, the Zhangs aren't going to single-handedly rescue the world from economic misery. | Of course, the Zhangs aren't going to single-handedly rescue the world from economic misery. |
But their spending, along with millions of other middle-class Chinese consumers is, in these doom-laden times, arguably one of the few bright spots on which a future global recovery might be based. | But their spending, along with millions of other middle-class Chinese consumers is, in these doom-laden times, arguably one of the few bright spots on which a future global recovery might be based. |
Rush to the cities | Rush to the cities |
On a patch of dry earth just outside Zhengzhou, a grandmother, her daughter-in-law and grandson are trying to scratch out a living in the face of one of the biggest changes in human history. | On a patch of dry earth just outside Zhengzhou, a grandmother, her daughter-in-law and grandson are trying to scratch out a living in the face of one of the biggest changes in human history. |
"It's been dramatic," Mrs Liu says, glancing at the distant city skyline. "There used to be houses and fields here, but now they've all gone." | "It's been dramatic," Mrs Liu says, glancing at the distant city skyline. "There used to be houses and fields here, but now they've all gone." |
"The city is taking over the countryside," she adds. | "The city is taking over the countryside," she adds. |
Over the past decade, Zhengzhou, the capital of China's central Henan Province, has accumulated another three million residents, swelling its population to nine million. | Over the past decade, Zhengzhou, the capital of China's central Henan Province, has accumulated another three million residents, swelling its population to nine million. |
It's a story that is being repeated in hundreds of cities across China and it's one that's far from complete. | It's a story that is being repeated in hundreds of cities across China and it's one that's far from complete. |
Mao Zedong spent years trying to eradicate the Chinese bourgeoisie, denouncing them, terrorising them and exiling them to the rural hinterland to learn from farmers like Mrs Liu. | Mao Zedong spent years trying to eradicate the Chinese bourgeoisie, denouncing them, terrorising them and exiling them to the rural hinterland to learn from farmers like Mrs Liu. |
But today, with the same Communist Party still in power, the theory has been turned on its head, and now it's the peasants who are being pushed into the cities. | But today, with the same Communist Party still in power, the theory has been turned on its head, and now it's the peasants who are being pushed into the cities. |
"We didn't have much land anyway," Mrs Liu says, "but what we have is now being taken to build roads." | "We didn't have much land anyway," Mrs Liu says, "but what we have is now being taken to build roads." |
With the construction teams working just a few yards away, her next peanut harvest may be her last. | With the construction teams working just a few yards away, her next peanut harvest may be her last. |
Spending power | Spending power |
In January last year, China's National Bureau of Statistics announced that, for the first time, China's urban population had surpassed its rural population. | In January last year, China's National Bureau of Statistics announced that, for the first time, China's urban population had surpassed its rural population. |
It's a shift that has been happening at an incredible pace, with 200 million people leaving the countryside in the past decade alone. | It's a shift that has been happening at an incredible pace, with 200 million people leaving the countryside in the past decade alone. |
The exact scale and scope of the next phase is still being debated, but no-one doubts China's new government intends to step up the mass migration yet another notch. | The exact scale and scope of the next phase is still being debated, but no-one doubts China's new government intends to step up the mass migration yet another notch. |
There is little choice, the policymakers believe, because the old model of economic growth based on exports and big government-spending has become unsustainable. | There is little choice, the policymakers believe, because the old model of economic growth based on exports and big government-spending has become unsustainable. |
So China is trying to shift to a model of growth based instead on the money in its own consumers' pockets. | So China is trying to shift to a model of growth based instead on the money in its own consumers' pockets. |
And that's where the new middle class comes in. | And that's where the new middle class comes in. |
Consumer spending currently makes up as little as 35% of China's total economy, a long way short of the 70% in other more developed economies. | Consumer spending currently makes up as little as 35% of China's total economy, a long way short of the 70% in other more developed economies. |
Pushing hundreds of millions more farmers into cities, it is hoped, will rebalance the economy through a virtuous cycle of development. | Pushing hundreds of millions more farmers into cities, it is hoped, will rebalance the economy through a virtuous cycle of development. |
The new urban residents will increase their earning power and so spend more on goods and services. | The new urban residents will increase their earning power and so spend more on goods and services. |
They will also educate their children to a higher standard, producing a new generation - not so much model citizens, but model consumers. | They will also educate their children to a higher standard, producing a new generation - not so much model citizens, but model consumers. |
If it's successful, then by some estimates, more than half a billion Chinese people could find themselves counted as middle class within the decade. | If it's successful, then by some estimates, more than half a billion Chinese people could find themselves counted as middle class within the decade. |
Moving in | Moving in |
The potential for the global economy is obvious, as any small selection from the myriad mind-boggling statistics clearly shows. | The potential for the global economy is obvious, as any small selection from the myriad mind-boggling statistics clearly shows. |
China is already the world's second biggest importer and its hunger for resources is keeping commodity-producing countries, such as Australia, in business. | China is already the world's second biggest importer and its hunger for resources is keeping commodity-producing countries, such as Australia, in business. |
The United States may well still have concerns about the trade deficit, but US exports to China have grown from $27bn in 2003 to $108bn last year. | The United States may well still have concerns about the trade deficit, but US exports to China have grown from $27bn in 2003 to $108bn last year. |
General Motors now sells more cars and trucks in China than it does back home. | General Motors now sells more cars and trucks in China than it does back home. |
Starbucks is opening stores at a rate of more than one a day and, according to China Daily, the British brand Burberry now operates 70 stores in 35 Chinese cities. | Starbucks is opening stores at a rate of more than one a day and, according to China Daily, the British brand Burberry now operates 70 stores in 35 Chinese cities. |
The list goes on and on, testament to the hordes of high-end and middle-market brands now falling over themselves to get a slice of China's growing consumer spending. | The list goes on and on, testament to the hordes of high-end and middle-market brands now falling over themselves to get a slice of China's growing consumer spending. |
For critics, China's rush to build a middle class presents a terrifying vision of mass consumption fraught with environmental and social dangers. | For critics, China's rush to build a middle class presents a terrifying vision of mass consumption fraught with environmental and social dangers. |
There are certainly challenges ahead. | There are certainly challenges ahead. |
China's economy could falter, or even collapse under a burden of debt, before the fledgling consumer society takes off. | China's economy could falter, or even collapse under a burden of debt, before the fledgling consumer society takes off. |
And policymakers know if they really want to unleash spending, they will need to reform China's system of residential permits that prevents many workers from building a permanent life for themselves in the cities. | And policymakers know if they really want to unleash spending, they will need to reform China's system of residential permits that prevents many workers from building a permanent life for themselves in the cities. |
But regardless, urbanisation is likely to continue apace, and for people such as the Zhangs, being middle class is nothing but a good thing. | But regardless, urbanisation is likely to continue apace, and for people such as the Zhangs, being middle class is nothing but a good thing. |
"My parents didn't even have enough to eat, and weren't that keen on children's education," Mrs Zhang tells me. | "My parents didn't even have enough to eat, and weren't that keen on children's education," Mrs Zhang tells me. |
"We can afford almost anything we want." | "We can afford almost anything we want." |
Send your pictures and videos to yourpics@bbc.co.uk or text them to 61124 (UK) or +44 7624 800 100 (International). If you have a large file you can upload here. | Send your pictures and videos to yourpics@bbc.co.uk or text them to 61124 (UK) or +44 7624 800 100 (International). If you have a large file you can upload here. |
Read the terms and conditions | Read the terms and conditions |
Previous version
1
Next version