Where Will China's Middle Class Come From?

An editorial in the Economic Observer discusses what it will take to see a Chinese middle class of 600 million people.

EO: 6亿中产从何而来
This is the decision-making concerns. May 16 meeting of the Central Financial Work Leading Group thirteenth meeting to study the two issues, namely, the supply-side structural reforms, the second is to expand the middle-income groups. The former special study recently repeatedly been central level meetings, and special studies were first central-level meeting on the latter system even after eighteen Party's history, if this is the level of strategic considerations, may not be an exaggeration.

We understand that if well-off society generally seen as a middle-class society, no matter at what level of income is divided, not only objectively requires sustained and stable economic growth, but also let people share dividends of economic growth. That is, not only do big cake, to be divided into good cake. In this process, the extensive development of the resource consumption can not continue to achieve new and old engine has become the key switch. From this perspective, the supply-side structural reforms and expand middle income groups has its own logic in a discussion session. Promote supply-side structural reforms, depending on whether the potential entrepreneurs enjoy the wealth surge, the protagonist of the story is the enterprises and entrepreneurs. So session, entrepreneurs play a good role to protect the various elements of the return on investment, and for strengthening the effective protection of all types of property rights.

Historically, the growth of the upgrading of traditional economic engine and a new engine, along with the expansion of middle-income groups, the new economy to a consumer middle class people to provide goods and services, while also continuing to "produce" a new middle-income groups. Conversely, a lack of innovation in the social economic stagnation will not breed new middle class, but also may lose happened. This is years ago Ohmae has described Japan, where the distribution of income groups to low-income and high-income upper and lower levels to move towards the left and right ends of the final peak, intermediate trough "M-based society."

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