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Not a middle-income nation

Updated: 2011-12-16 08:12

(China Daily)

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The blue book on industrial competitiveness, released by the Chinese Academy of Social Sciences (CASS) on Dec 12, says China has become a middle-income country, according to the World Bank. The bank says that countries with per capita income between $3,856 and $11,905 are in the middle-income group, though they have to improve industrial competitiveness to raise their overall national income level because they face weakening economic growth, says an article in Guangzhou Daily. Excerpts:

State Statistics Bureau data show that China's per capita income is $4,377. Irrespective of whether the statistics present China's actual economic strength, there is a difference between national per capita income and general per capita income - the former includes incomes of enterprises and governments, while the latter comprises only citizens' personal income.

The proportion of individuals' income in Western countries' GDP is generally 50 to 60 percent, but the income of China's urban residents (which is much higher than their rural counterparts) account for only 43 percent of the country's GDP. This means the national per capita income is $4,377 but citizens' per capita income is about $1,840.

But the 2011 Blue Book of Cities in China, also issued by the CASS in August, says that since the middle- and low-income groups still take up a huge proportion in Chinese cities, the expected olive-shaped social structure will take shape only by 2019. This means China is still not an upper middle-income country.

Moreover, the raising of the poverty line for rural people from an annual income of 1,196 yuan in 2000 to 2,300 yuan ($362) has added an estimated 128 million rural residents to the impoverished population.

Considering that the poverty line for a family of three in the US is $15,000, it would be ridiculous to label China as a "middle-income" country.

According to media reports, Chinese people are paying more than Americans to buy daily necessities, though an average Chinese earns one-tenth of what his/her American counterpart earns. Given social welfare such as housing, medical services, education and old-age care in China lag far behind those in developed countries, even if our income reaches the upper-middle category, Chinese people will not feel equally happy.