The Rise of the Middle Class in the People’s Republic of China

Abstract:     
Using $2–$20 (purchasing power parity) per capita daily income as the definition of middle class, majority of households in the People’s Republic of China (PRC) have become middle class by 2007, which is especially impressive given that around 40% of households were still considered poor in 1991. The rise of the middle class is evident for both urban and rural areas and across East, Central, and West PRC. The drivers of this trend include market development, industrialization, and privatization. As industrialization and urbanization continue in the PRC, the growth of the middle class will intensify, and could hold the key to altering the PRC’s growth pattern from investment- and export-led to consumption-led.

Number of Pages in PDF File: 47

Keywords: middle class, poverty, income distribution, People’s Republic of China

JEL Classification: D31, D63, N35, O15

working papers series