It is interesting to note that two sources in China indicated that the Chinese middle class defined as those whose annual income is 60,000 Yuen/renminbi and above is now around 300 million.
If you take this 300 million middle class Chinese and compare it with other countries, a startling reality emerges. For example, the total population of the US is 310 million, Japan's population is 128 million, UK is 59 million, Germany is 80 million and Canada is 33 million. The Chinese middle class is almost equal to the total population of the US, 2.3 times larger than the Japanese population and 3.75 times the population of Germany and 9 times the Canadian population!!! There is no question that China had made significant economic progress in the last 30 years. We need to keep two other facts in mind: 1) the Chinese middle class is growing literally daily; 2) their income is not static but on the upward climb yearly. More than 95% of their growth is fuel by internal consumption and investments. External trade contributes less than 1% to China's growth! The Beijing Government is transitioning their growth more and more to domestic consumption and expansion rather than exports.
To compare the middle classes of the various countries a rational approach is to compare how much goods and services can 60,000 Yuen purchase in China, relative to what US$41,000 or US$60,000 can purchase in America (depending which figure you consider as "middle class" American,) The IMF based this on the Purchasing Power Parity evaluation or PPP. The average wage for a Chinese urban worker is say 1,500 Yuen/month, or 18,000 Yuen per year. At 60,000 yuan the middle class Chinese is relatively fairly well off.
China is a dichotomy of the urban rich and middle classes and the rural poor, modern cities and the rural villages, and so on. There are also urban poor. To compare China with the developed world, most Western economists use the per capita GDP as a parameter. The per capita GDP of China is the GDP divided by the total population of about 1.3 billion people. However, in my opinion it would not be a very accurate comparison because of the developed eastern, coastal regions comprising of about 600 million and the rural, under-developed central and western regions of China with a population of about 700 million. A more meaningful comparison is to use the Purchasing Power Parity per capita GDP of the eastern, coastal regions of China, which is developed. If that is done I feel that it will result in a more meaningful comparison; the developed vs the developed, and the end result will be that the developed West and Japan will sit up and take notice how economically advanced China is with an almost comparable income level and standard of living. After all 600 million Chinese urbanites is twice the size of the US population! This segment of China will make a meaningful comparison with the developed West and Japan.
Five years ago nobody take notice of China, since China prefers obscurity and avoid the limelight. Even then China by then had accumulated more than a billion dollars US. In 2011 news coming out of China impact world businesses, prices and stock markets. Western presses proclaimed that China has overtaken Japan as the world’s second largest economy based on China’s data for the 3rd quarter of 2010. In Japan they claim that one quarter does not prove anything, similar to the saying that one swallow does not make a summer. Japan was unwilling to concede 2nd place to China. China is industrializing across the board, has a land mass 26 times that of Japan and it population is more than 10 times larger the Japan. Japan is only a small island nation. Its potential is very limited and its population is aging rapidly. News from Japan hardly cause any ripple on the world market. Japan has no hope of ever challenging China for world dominance. Chinese progress has not only overtaken Japan, but in the next 10 years can become the world’s biggest economy. Ceteris paribus, China’s economy in the next 20 years will dominate the entire global economy. Look at the motor vehicle sales figures for 2010: China sold 18 million vehicles, US sold 12.4 million vehicles. China’s population is 4.5 times that of the US. As China develops and development is rapidly spreading across its entire land, it is easy to see that this economic behemoth will come to dominate the global economy. The nearest challenger is India, but the Indian economy today is only one quarter or less of that of China! Area wise China is 3.1 times the size of India. China’s infra structures (bridges, roads, highways, airports and seaports) are modern whereas India is still struggling to modernize its infra structures.
In the next 10 to 15 years the world will witness gigantic shifts in global trade patterns with accompanying shifts in wealth, influence, economic and military powers. Today China with its US$2.85 trillion foreign reserves can no longer remain obscure and the eyes of the world are focused on its every move. Take the test flight of the J-20 in Chengdu during David Gate’s visit.
For skeptics out there the Bible foretold the rise of China 2000 years ago in the Book of Revelation, the last book of the Bible. You can read and study the Book of Revelation, but unless the Holy Spirit reveals its secrets, you will not be able to locate the clue revealing the rise of China. Please email me and I’ll be happy to share it with you.
Q. Is conflict or war between China and the US inevitable?
What does the Bible say? Very interesting question!
What do you think friends?
(author unknown)
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