By Yang Xiuna, China Development Research Foundation & Zhuo Xian, Research Department of Development Strategy and Regional Economy, DRC

Research Report, No.231, 2021 (Total 6296) 2021-8-30

Abstract: Based on the micro data collected from 34 countries, this paper takes 60 percent and 200 percent respectively of the median annual income earners in 28 EU countries in 2018 as the upper and lower limits to define middle-income group and gives an analysis of the achievements China has made and challenges facing China’s efforts in expanding the middle-income group from an international perspective. In recent years, China’s middle-income group has grown rapidly from 7.5 million in 2002 to 344 million in 2018, boasting the largest number in the world. Over the past two decades, China is the only one among major middle-income countries that has seen rapidly expanding of middle-income group, with the proportion of middle-income earners higher than those middle-income countries. Compared with countries with the same per capita GDP, the proportion of middle-income group in China has increased faster. However, the proportion of middle-income earners in China is still significantly lower than that of developed countries. It presents an inverted U trajectory between the proportion of middle-income group and per capita GDP. This performance is in line with international development standard. At present, both the proportion of middle-income group and per capita GDP are slowly edging up. The expansion of middle-income group in China is still checked by people’s low income and the large number of vulnerable middle-income group.

Keywords: middle-income group, international standard, inverted U trajectory