Chart of the week: China’s expanding middle-class muscle

Between 2006 and 2016, average incomes in China more than tripled from about $3,000 to $10,000 per year.

912_COTW

Between 2006 and 2016, average incomes in China more than tripled from about $3,000 to $10,000 per year. According to McKinsey, 76% of China's urban population will be considered middle class (defined as an urban household that rakes in $9,000- $34,000 a year) by 2022.

In 2000, just 4% of the urban population was deemed middle class. But by 2012, 68% fell into that bracket. Rising incomes and spending are underpinning China's gradual transition from an economy based on exports and investment to one where consumption accounts for the lion's share of GDP.

Meanwhile, average incomes in the UK are barely keeping up with inflation; in the US the real median wage is a mere 10% above its 1979 level.

Viewpoint

"There's been no shortage of crazy taxes over the years. In the 17th century theRussian government announced a tax on beards, which would definitely raise a fair bit of money if introduced in Shoreditch today. The 18th century saw English taxes on printed wallpaper as well as hats with rich folk paying extra to have their heads covered. But when it comes to the all-time most stupid tax in British history, we're living with it [now]. It goes by the name of business rates a tax on commercial property shops, pubs, offices and factories what's bonkers about business rates is that you fork out the same amount no matter if you're a start-up with zero revenues or a vastly profitable and wealthy enterprise with millions in the bank. The only thing that's looked at is the building you're in That's a massive disadvantage for high-street stores versus online retailers, making it even harder for physical shops to compete."

Rohan Silva, Evening Standard

Recommended

What China’s new red dawn means for Hong Kong
Chinese economy

What China’s new red dawn means for Hong Kong

China has once again moved to tighten its control over the former British territory and global financial centre. What will remain of the old Hong Kong…
10 Apr 2021
Investors get a reality check in China as stockmarkets fall
China stockmarkets

Investors get a reality check in China as stockmarkets fall

The People’s Bank of China, started to remove liquidity from the financial system at the start of this year, driving stock prices down.
2 Apr 2021
China’s bull market pauses for breath
China stockmarkets

China’s bull market pauses for breath

China's CSI 300 stockmarket index has fallen by 10% from its latest peak. But investors may just be catching their breath. 
12 Mar 2021
Will the China-US trade war continue?
Global Economy

Will the China-US trade war continue?

The White House still seems to be talking tough on China, but few people know how Joe Biden will handle the world’s second-biggest economy.
5 Feb 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Four investment trusts for income investors to buy now
Investment trusts

Four investment trusts for income investors to buy now

Some high-yielding listed lending funds have come through the crisis with flying colours. David Stevenson picks four of the best.
12 Apr 2021
Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021