NEW YORK (CNNMoney) -- CNNMoney interviewed Helen Wang, author of The Chinese Dream: The Rise of the World's Largest Middle Class and What It Means to You. A consultant, Wang was raised in China and has lived in the United States for more than 20 years.
A. I define middle class as households with an annual income of between $10,000 and $60,000 U.S. dollars. But income is a little misleading because the cost of living in China is very different. A rule of thumb is a household with a third of its income for discretionary spending is considered middle class.
In China, the middle class is all concentrated in big cities, not like in this country, where a lot of the middle class are in the suburbs. Most people have a college education and relatively stable jobs. There are a lot of entrepreneurs and a lot of white collar workers, working for multinationals or state-owned companies.
They are a lot younger ... 20 to 50. A lot of them own homes. Like Westerners, they want everything Americans have.
This new middle class just emerged in the last 15 to 20 years. Fifteen years ago, people didn't have cars yet. But in the last seven, eight, or nine years ... everyone has a car. Some people have more than one car.
Q. How big is the Chinese middle class?
A.It is estimated that it's more than 300 million -- already larger than the entire population of the United States. About 25% of the population is middle class. It's about 50% of the urban population.
Q. How did the middle class climb the economic ladder?
A. A lot of it is entrepreneurship. With China's economy growing over the last 20 to 30 years, there have been a lot of business opportunities.
Some people still go to college and then get good jobs. A lot of multinationals employ these young college graduates. They pay relatively better than Chinese companies. Many foreign companies are contributing to creating the white-collar middle class.
Chinese state companies also employ a lot of people. Their income has more than tripled over the last 10 or 15 years. Q. How are they changing China?
A. The Chinese are shopping a lot more. Retail is booming like a wildfire in China. There are a lot more consumers and they are demanding a lot more services.
A lot of Chinese, especially younger consumers, are really into the luxury brands. They associate Western luxury brands with quality of life and sophistication. They want gyms, health care clubs and definitely travel. They want to see the world. The restaurant business is doing very well.
The younger generation -- people under 30 -- they are consuming like crazy. They save zero. They spend all of their salary on a Louis Vuitton purse. A lot of them stay with their parents so they don't have housing expenses. But once they get married, then they start to save.
What happens when 75% (1 Billion people) of Chinas population is middle class, much like western countries. If the present 300 million Chinese create most of the present demand for resources, what effect will this have on world wide commodity prices. Dont just think of Iron ore, coal what about Food and services. How will a further 700 million Chinese middle class affect Australias economy over the next 25 years.
According to the United Nations, for the Chinese population to live like us in the west would require the entire resources of 1.5 planet earths. If you include india, the rest of asia and africa it is 3 planet earths. If we do not have sufficent resources on our planet to modernise such a large population, what effect will this scaricity or competition between nations to secure resources have for Australia.
What happens when 75% (1 Billion people) of Chinas population is middle class, much like western countries. If the present 300 million Chinese create most of the present demand for resources, what effect will this have on world wide commodity prices. Dont just think of Iron ore, coal what about Food and services. How will a further 700 million Chinese middle class affect Australias economy over the next 25 years.
According to the United Nations, for the Chinese population to live like us in the west would require the entire resources of 1.5 planet earths. If you include india, the rest of asia and africa it is 3 planet earths. If we do not have sufficent resources on our planet to modernise such a large population, what effect will this scaricity or competition between nations to secure resources have for Australia.
China will probably still be a nice little earner for Australia at that point.
NEW YORK (CNNMoney) -- CNNMoney interviewed Helen Wang, author of The Chinese Dream: The Rise of the World's Largest Middle Class and What It Means to You. A consultant, Wang was raised in China and has lived in the United States for more than 20 years.
A. I define middle class as households with an annual income of between $10,000 and $60,000 U.S. dollars. But income is a little misleading because the cost of living in China is very different. A rule of thumb is a household with a third of its income for discretionary spending is considered middle class.
In China, the middle class is all concentrated in big cities, not like in this country, where a lot of the middle class are in the suburbs. Most people have a college education and relatively stable jobs. There are a lot of entrepreneurs and a lot of white collar workers, working for multinationals or state-owned companies.
They are a lot younger ... 20 to 50. A lot of them own homes. Like Westerners, they want everything Americans have.
This new middle class just emerged in the last 15 to 20 years. Fifteen years ago, people didn't have cars yet. But in the last seven, eight, or nine years ... everyone has a car. Some people have more than one car.
Q. How big is the Chinese middle class?
A.It is estimated that it's more than 300 million -- already larger than the entire population of the United States. About 25% of the population is middle class. It's about 50% of the urban population.
Q. How did the middle class climb the economic ladder?
A. A lot of it is entrepreneurship. With China's economy growing over the last 20 to 30 years, there have been a lot of business opportunities.
Some people still go to college and then get good jobs. A lot of multinationals employ these young college graduates. They pay relatively better than Chinese companies. Many foreign companies are contributing to creating the white-collar middle class.
Chinese state companies also employ a lot of people. Their income has more than tripled over the last 10 or 15 years. Q. How are they changing China?
A. The Chinese are shopping a lot more. Retail is booming like a wildfire in China. There are a lot more consumers and they are demanding a lot more services.
A lot of Chinese, especially younger consumers, are really into the luxury brands. They associate Western luxury brands with quality of life and sophistication. They want gyms, health care clubs and definitely travel. They want to see the world. The restaurant business is doing very well.
The younger generation -- people under 30 -- they are consuming like crazy. They save zero. They spend all of their salary on a Louis Vuitton purse. A lot of them stay with their parents so they don't have housing expenses. But once they get married, then they start to save.
Nice start Peter - here's a massive tip on life - don't cherry pick your information, it wont serve you well, be honest and look at things properly and honestly and respond to that reality rather a selected cherry picked reality.
What happens when 75% (1 Billion people) of Chinas population is middle class, much like western countries. If the present 300 million Chinese create most of the present demand for resources, what effect will this have on world wide commodity prices. Dont just think of Iron ore, coal what about Food and services. How will a further 700 million Chinese middle class affect Australias economy over the next 25 years.
According to the United Nations, for the Chinese population to live like us in the west would require the entire resources of 1.5 planet earths. If you include india, the rest of asia and africa it is 3 planet earths. If we do not have sufficent resources on our planet to modernise such a large population, what effect will this scaricity or competition between nations to secure resources have for Australia.
But who's going to make all their crap Mike? The Africans? The model doesn't work. We can't all be rich.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
So this middle-class has evolved through entreprenuership and govt has it? So 1/4 of the population has got wealthy
a) through businesses that make stuff (more or less) b) through governing the other 3/4
Anyone who believes that needs to take a good long hard look at themselves.
The truth is the term middle-class is being stretched to breaking point here, and many who have made money have done it through the biggest credit bubble in human history. It aint real wealth.
The only way that China will have a REAL middle class is through substitution with the West. To some degree, already happening, but essentially a zero-sum game.
Nice start Peter - here's a massive tip on life - don't cherry pick your information, it wont serve you well, be honest and look at things properly and honestly and respond to that reality rather a selected cherry picked reality.
There is no point in lying to yourself.
audas I linked a story without any comment from me so that others could evaluate the information for themselves.
If you choose to not believe it then that is fine by me.
Any expressed market opinion is my own and is not to be taken as financial advice
It will be many decades, before China's middle class even approaches the number, yet alone the purchasing power of the Western middle class.
Repost this thread in 200 years time and it MIGHT be relevant.
Really. I guess Apple got it wrong then when it decided to focus its future growth on China. Oh yes Apple profits just broke all kinds of records, due to massive demand from Chinas middle class for Iphones and Ipads. I guess your brighter then the Apple CEOs who just made $11.9 billion profit in a quater.
China is in transition, it will be for the next few decades. China will move from an export producer to a net importer of products, not just resources. Much like the US today, as Chinas income rises its people will demand more. Chinas per capital incomes has gone from be 30-1 vs the US per capita income to be 10-1 today in just 10 years.
The rest of the world will in the comming years produce far more and export it to China. The problem will be this.
Resources. With enough people and technology we can produce almost limitless amounts of what we need. The problem is having enough oil, water, gas, iron ore, coal, copper, gold and so on to produce it. What will be the price of oil when Chinas middle class grows from 300 million to 600 million. China is expected to grow from the present 18.5 million cars per year sold to 30 million per year by 2020, just 8 years away for car growth to almost double. The US sells about 16 million cars/trucks per year as an example. To build another 11.5 million cars per year is alot of resources, let alone the roads, freeways the need or the houses and apartment blocks to keep them in.
So we need alot more resources. So if resources are limited but demand is growing rapidly, what will happen to prices for resources over the comming years. This only takes into account of China, add in India and the rest of south east asia and we have a much bigger problem .
The other flip of the coin is when a nation cannot buy resources its needs at a sustainble price, it goes to war to get them. Could we see wars for resources, land much like the 1st half of the 20 century.
It will be many decades, before China's middle class even approaches the number, yet alone the purchasing power of the Western middle class.
Repost this thread in 200 years time and it MIGHT be relevant.
Really. I guess Apple got it wrong then when it decided to focus its future growth on China. Oh yes Apple profits just broke all kinds of records, due to massive demand from Chinas middle class for Iphones and Ipads. I guess your brighter then the Apple CEOs who just made $11.9 billion profit in a quater.
China is in transition, it will be for the next few decades. China will move from an export producer to a net importer of products, not just resources. Much like the US today, as Chinas income rises its people will demand more. Chinas per capital incomes has gone from be 30-1 vs the US per capita income to be 10-1 today in just 10 years.
The rest of the world will in the comming years produce far more and export it to China. The problem will be this.
Resources. With enough people and technology we can produce almost limitless amounts of what we need. The problem is having enough oil, water, gas, iron ore, coal, copper, gold and so on to produce it. What will be the price of oil when Chinas middle class grows from 300 million to 600 million. China is expected to grow from the present 18.5 million cars per year sold to 30 million per year by 2020, just 8 years away for car growth to almost double. The US sells about 16 million cars/trucks per year as an example. To build another 11.5 million cars per year is alot of resources, let alone the roads, freeways the need or the houses and apartment blocks to keep them in.
So we need alot more resources. So if resources are limited but demand is growing rapidly, what will happen to prices for resources over the comming years. This only takes into account of China, add in India and the rest of south east asia and we have a much bigger problem .
The other flip of the coin is when a nation cannot buy resources its needs at a sustainble price, it goes to war to get them. Could we see wars for resources, land much like the 1st half of the 20 century.
So how many of the other 2787 NASDAQ listed companies reported record earnings based on China sales?
Ridiculous cherry picking.
China's middle class is largely irrelevant at this point.
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