By Wang Yiming, Chen Changsheng, Liu Peilin, Feng Wenmeng, Liu Tao, Jiang Yu, Xuan Xiaowei, Zhang Junwei, Wang Xiongjun, Wang Yingying, Shi Rongjie, Li Chengjian & Gong Sen, Research Team on “A Study on Increasing the Proportion of Middle-Income Group”, DRC

Research report, Special Issue No.15, 2017 (Total 1539) 2017-3-30

Abstract: The middle-income group has a great impact on the long-term social and economic development. At present, China’s middle-income group is featured by a swift growth in number, a small proportion in the total population, a relatively low income compared with developed countries and imbalanced distribution in various sectors and different regions. The consumption structure of middle-income group is constantly optimized the upgraded with great potential for further improvement. However, influenced by the factors relating to development stages, growth models and institutional policies, the increasing number of middle-income people is restricted to a certain extent. The main reasons lie in the facts that more efforts are made towards investment and production while consumption and living standard are neglected; the flow of production factors and optimized allocation are restricted; there are many obstacles impeding the urbanization of migrant rural farmers; the private enterprises’ rights and interests and intellectual property rights are not properly protected; the public service is unequal and social security system is incomplete. By international comparison, the increase of the proportion of middle-income earners rests on a mix of policy measures, including the improvement of labor productivity, the fleshing out of wage formation mechanism, the optimization of tax regulation function, the establishment of an appropriate social security system, more support to poor areas and vulnerable social groups, and the promotion of social mobility. In the next few years to come, China needs to take comprehensive measures to boost the expansion of middle-income groups.

Key words: middle-income people, constraints, international experience, policy options