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China strives for a - wince - middle class

By Staff writer of The Christian Science Monitor / November 25, 2002



BEIJING

At the 16th Communist Party Congress earlier this month, outgoing President Jiang Zemin cited a main goal for China as being what he termed xiao kang - or a well-off life. The 5,000-year-old phrase refers to a condition of prosperity, and evokes something similar to the "car in every garage, and chicken in every pot" adage in the United States.

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While the gap between rich and poor here quickly widens, China's leaders are engaged in a delicate dance of words and concepts as they try to create a stable middle class without actually using words loathed by Chairman Mao for their petty bourgeois implications.

"We can't use the term 'middle class' because it implies civic and political cultures that we aren't ready for," says a party official, speaking privately.

"We have to use the term 'middle income,' " he continues. "Our Constitution one day will say it is the government's job to legally protect private assets. But we are not yet at that point."

In an era of privatization, China is tailoring policies to benefit the "middle- income" group - an ideal set of educated consumers who will earn between $3,000 and $12,000 a year. Such changes include expanding teachers' salaries and pension and healthcare plans for urban residents, as well as tax breaks, loans, and new advantages for entrepreneurs.

One reason China's leaders want at least an approximation of a middle class is to provide a steadying social anchor between the great chunk of China's wealth, held by several hundred families, and the rest of the population. Roughly 70 percent of 1.3 billion Chinese are peasants who earn about $100 a year. Along with the deterioration of state industry - workers once championed as ushers of a glorious revolution, but now idle - the current social dynamics are troubling.

"The main reason to focus on developing a middle group is social stability," says the party official. "The income gap is the core of our concern."

Another reason is economic self-sufficiency. In the past decade, China has attracted some $800 billion in foreign investment - used to build Beijing and Shanghai into metropolises rivaling any in Asia. Yet for China to progress, planners here say, what is needed is a middle-income group capable of buying Chinese products and slowing China's dependency on overseas capital that seeks cheap labor.

But what China wants, and what China can say it wants, are two different things, analysts say. While entrepreneurs are welcomed into the Communist Party to keep an eye on new wealth, that's not the same as talking about the creation of a middle class - since no officials are ready to suggest that workers are no longer "the vanguard" of the people.

Lu Xueyi, a top scholar in Beijing with the Chinese Academy of Social Sciences, pointed out in a working session at the Party Congress, "In Western countries, those at a middle-income level are called the middle classes. Politically, they are in line with the government of the day and the ruling party. Economically, they are steady consumers and a major force in economic life. They make stable investments in education and are producers and consumers of advanced culture. In this way, larger middle-income groups lead to more stable societies."

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