by Jacky Jin, Visiting Scholar ‘07

According to China’s National Statistics Bureau, 24.5 million households with a total of 75 million people became middle class families in 2005. The Chinese Academy of Social Sciences states that they earned annual incomes as high as $10,000, while a report published in December 2005 from the Boston Consulting Group and the Wharton School documents middle class earnings above $8,700.

China’s central government informally supports the interests of the middle class through favorable tax policies and employment opportunities. But Party authorities have not formally legitimized this social group and show some concern about whether its emergence could trigger attempts to change the political system. Some experts predict that the rising middle class poses a hidden threat to the Communist Party’s (CPC) current regime.The salaried professional, technical, administrative, and managerial white-collar workers who have special skills and expertise in metropolitan areas can play two roles in China’s transition. Amounting to 15% of the working population, the middle class enjoys high education and has strong consuming power. They are innovative, talented and respected.

The Nobel Prize-winning economist Robert Lucas declared the multiplier effects that stem from talent clustering to be the primary determinant of social growth. That’s all the more true in China, but gauging the precise influence the middle class will exert is nevertheless difficult.

On the one hand, the expansion of the middle class will definitely spur domestic consumption demand which may lead to more working chances for the lower class. This can help ease emerging economic contradictions and even social conflicts by forcing out extremism. And because the middle stratum typically adopts a blend of moderate and conservative ideology, authorities can easily accept its support for the mainstream ideology of a socialist country while looking to its contribution in safeguarding the existing regime.

On the other hand, the middle class could also pose a political threat to the central party because even as the economic standing of this affluent stratum has increased, so too has its political desire.

On November 14, 2006, 500 protesters, most of them members of Beijing’s new middle class, gathered near the Beijing Zoo carrying stuffed animals and signs asking that authorities stop the indiscriminate killing of dogs. In China raising dogs has become a typical characteristic of this newly affluent social group. The middle class’s campaign, the first of its kind, was launched just after the Chinese government announced a crackdown on dogs in urban areas.

The Economist magazine even described the central authorities’ awkward situation by asking, “has China taken in a Trojan horse?” Resistance against the new “one-dog policy” sent a small signal of the potential power of the middle class to take a position and wield political clout. Ultimately President Hu Jintao intervened to end the national crackdown on dogs after reading protestors’ complaints. No one knows how this new social group will define its identity or assert its influence, but other conflicts over lifestyle, privilege or the demand for personal freedom could easily emerge.

(Jacky Jinis the author in Chinese of numerous books on business and culture, as well as founding pubisher of FHM China)