Advertisement

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.

Advertisement - Article continues below

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

Advertisement
Advertisement

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Guru watch: buy gold ahead of China's big currency move
Gold

Guru watch: buy gold ahead of China's big currency move

China has steadily been building “a renminbi-based international payments system", says Charles Gave, founding partner and chairman of Gavekal.
27 Jul 2020
China leads the global economic recovery
Chinese economy

China leads the global economic recovery

China's economic recovery is now well under way, after a 6.8% fall in GDP in the first three months of the year.
22 Jul 2020
China’s stockmarket melt-up will end in tears
China stockmarkets

China’s stockmarket melt-up will end in tears

China's stockmarkets are up by 13% so far this year, but the rally could end in a brutal crash.
10 Jul 2020

Most Popular

BP has slashed its dividend – and markets love it
Income investing

BP has slashed its dividend – and markets love it

BP has bowed to the inevitable and cut its dividend in half – and its share price promptly rose. John Stepek explains what it means for shareholders …
4 Aug 2020
Listed companies are dying out, and that could have serious consequences
Stockmarkets

Listed companies are dying out, and that could have serious consequences

Private equity is taking over from public stockmarkets as the biggest provider of capital to companies. That’s bad for investors and bad for society a…
3 Aug 2020
Gold hits the big $2,000 level – are Aim miners about to play catch up?
Gold

Gold hits the big $2,000 level – are Aim miners about to play catch up?

With the price of gold shooting through $2,000 an ounce, the yellow metal looks unstoppable. Things are so bullish, even Aim-listed junior gold miners…
5 Aug 2020