2016-06-07

China's Middle Class Standard of Living Hurt By A-Share Decline, Housing Market Rise

Interview with researcher Wang Xiaolu of the National Economic Research Institute China Reform Foundation.
NBD: the middle-income groups, the pace of expansion slowed What are the reasons?

Wang Xiaolu: After reform and opening, the middle-income groups to expand rapidly. But in the past ten years, the middle-income groups, a marked slowdown in the pace of expansion. The reason is mainly the industry monopoly, excessive government intervention in the market as well as part of official corruption and other factors affecting the market environment, hinder fair competition. Further changes in the stock market and real estate market, so that part of the middle-income groups back to the standard of living of low-income, plays a reverse redistribution effect.


NBD: How should be understood that high prices and other factors allow some low-income middle-income groups go back to the ranks of low income?

Wang Xiaolu:Small businesses, because of government intervention, which also exist a large number of rent-seeking behavior, it becomes very difficult to survive. Meanwhile, a market monopoly power is too strong, competitive industry would be unfairly distributed. If the gross national income and a large part of social wealth are concentrated in a few industries and businesses, will obviously not conducive to the existence and development of middle-income groups.

Over the years there is a phenomenon, the stock market rose and house prices fell, land prices are too high, in fact, on the part of middle-income groups had a significant impact. So if there is no strict supervision of the capital market is not a high degree of transparency, market management practices, it is easy to damage the interests of small shareholders. Availability of land and real estate market growth of middle-income groups also played a bad role in some cities housing prices rose much faster than income growth, which may have led the middle income group into of low-income standard of living.

With the progress of urbanization, cities housing prices, land prices have inevitability, but rising so fast, there are many non-normal factors. Under the current system, local governments usually unified land acquisition, land exclusive monopoly of the land market, but also greatly pushed up prices. It's very hard for ordinary working-class to rely on their income to buy a house in the city, how can they become middle-income?
iFeng: 王小鲁:股市和楼市变化让中等收入群体重回低收入

No comments:

Post a Comment