The Expansion of the Prosperous Middle Class and Consumption-Led Growth in China

China’s recent economic pronouncements articulate the interconnected goals of achieving ‘common prosperity’ and rebalancing from investment-led to consumption-led growth. These pronouncements raise two questions: First, do we in fact see in China the emergence of a prosperous middle class, one with incomes and spending power similar to middle-class households in the West? Second, to what extent does China’s prosperous middle class generate the consumption needed for rebalancing? Professor Sicular provides answers to these questions based on analysis of household survey data spanning the years 2002 through 2018. The analysis reveals that a prosperous middle class emerged rapidly after 2002 and by 2018 made up a significant share of the population. In other words, Chinese households have been catching up with middle-class households in the West. Growth of China’s prosperous middle class has not, however, brought about proportionate increases in aggregate consumption, and its potential to support future consumption growth is questionable. These findings point to challenges going forward for China’s macroeconomic policy agenda.

About the speaker

Terry Sicular is a specialist on the Chinese economy. Her research combines economic analysis with knowledge of China’s history, political economy and institutions, and makes use of evidence from fieldwork, survey data, and primary Chinese source materials. Recent publications include the co-edited book Changing Trends in China’s Inequality (Oxford Univ. Press) and journal articles “Catching up with the West: Chinese Pathways to the Global Middle Class” (The China Journal) and “The Long-term Evolution of National Income Inequality and Rural Poverty in China” (China Economic Review). She is a two-time recipient of the Sun Yefang Prize in Economic Science. Since 2000 she has been a lead member of the China Household Survey Project (CHIP), an international collaborative survey research project. She has served as consultant to governmental and non-governmental organizations such as the World Bank, United Nations, and Asian Development Bank. She is Professor of Economics at Western University (Canada), an invited professor at École Normale Supérieure de Lyon, and an honorary guest professor at Beijing Normal University. Prior to joining Western University she held appointments at Stanford University and Harvard University. She is an alumna of Pomona College and received her doctorate in economics from Yale University.

Registration

This event is open to the public and free to attend, however registration is required. Complete this form to register.

Please note that this talk is taking place on campus and will not be recorded or live-streamed.

Chair: Professor Steve Tsang (Director, SOAS China Institute)

Organiser: SOAS China Institute

Contact email: sci@soas.ac.uk