The latest polls show at the Chinese Academy of Social Sciences, 44.4% of those surveyed pointed out that China over the past year, they only spent 1000 yuan (us $154) on leisure spending, that is to say, the average per person, per month to play fund is only 83 yuan, the equivalent of only enough to buy two sets of McDonald’s Angus cattle bacon cheeseburgers thick.
According to some experts, 600 million People in China earn just 1,000 yuan a month, as Premier Li Keqiang pointed out in June. What the CASS poll shows, then, is that not only do the vast majority of Chinese earn less and spend less beyond basic expenses, but the gap between rich and poor can be serious. This, they say, is a slap in the face of official claims that “China has been lifted out of poverty and finished building a moderately prosperous society in all respects since this year”.
Moreover, while China’s export performance has been impressive in recent years, showing the prospect of economic recovery from the epidemic, China has set the development axis of both internal and external cycles, in which China’s economic future is not immune to the negative impact of the trend of global supply chain de-Sinicization. On the internal cycle, how to boost the growth of China’s domestic market under the influence of the people who earn less and spend less also poses a challenge.
Add to that structural labor market problems, fewer children, an aging population and grim unemployment prospects, and experts say it will be difficult for officials to double per capita gross domestic product to $20,000 by 2035, if not effectively address them.
Poll: 40 percent of people spend less than 1,000 yuan on leisure
According to a survey released by the Chinese Academy of Social Sciences last Tuesday (November 9), the average annual leisure consumption of Chinese citizens in the past year was 5,647 yuan, Chinanews.com reported. Among them, personal leisure consumption expenditure accounts for 22.7% of 1001-3000 yuan, 10% of 3001-5000 yuan, and 11.1% of 5001-10000 yuan. 11.8% of people spend more than 10,000 yuan on leisure, but as high as 44.4% spend less than 1,000 yuan, one tenth of that of high-income groups.
A couple wearing face masks dance near The Yangtze River Park in Wuhan, Hubei province. (12 May 2020)
If you zoom in on this poll and compare it to China’s population of 1.4 billion, that represents 620 million people with only an 83-yuan fun-fund a month, who might have to go to McDonald’s and buy two extra Angus Thick beef burgers.
Another 320m people have fun funds of less than rmb3,000 a year, equivalent to about Rmb250 a month, or permission to go to a restaurant for a medium – and high-end steak dinner.
Only the 160 million rich have above-average leisure spending, with tens of thousands of yuan on hand each year for entertainment.
Has China really lifted itself out of poverty?
To this, the scholastic research associate in the Taiwan Wu Mingze said in an interview with voa, can be seen from the survey, the majority of Chinese people is still mainly in the basic life consumption, leisure consumption, rare and low-income population proportion is still high, coupled with the gap between rich and poor is serious, it was hard to believe that China has done comprehensive poverty alleviation, and enter the stage of a well-off society in an all-round way.
A woman wearing a face mask rides an electric scooter through a market in Wuhan, Capital of Central China’s Hubei province. (24 January 2020)
“The representative said, ‘The income of the majority of the population is still very low, the deterioration of income distribution is very, very serious, the wealth gap is very serious,'” he said. Although its minimum wage is rising every year, its workers are actually relatively more deprived, because the rich are getting richer. The wages of the workers are growing, but at a much slower rate than those of the capitalists, and prices are rising.”
Wu said the 333 principle is the basic guideline for a well-off society. It means the average well-off family will spend a third of their income on basic food and clothing, another third on savings and the last third on enjoyment of life and entertainment.
Unless most Chinese only earn money, he said, the poll suggests that perhaps more than 60 percent of China’s population, or 940 million people, spend less than 3,000 yuan a year on leisure, meaning they live from hand to mouth, hardly a well-off society.
As a result, many analysts are not optimistic that China will rely on domestic consumption to support its economy in the future.
As a result, China plans to become a medium-developed country by 2035, doubling its per capita GDP from the current level of $10,000 to $20,000. Wu also said it will be very difficult.
Before the reform and opening up, China’s per capita GDP was only about 230 US dollars in 1987. It did not reach 10,000 US dollars until 2019, which is equivalent to a milestone that took 40 years to reach.
Wu mingze said China needs to double its per capita GDP to $20,000 in the next 15 years, which would mean annual economic growth of around 5 percent. Given the size of China’s economy today, he says, the experience of big economies is that growth usually declines only year by year. As a result, he said, it will be difficult for China to sustain 5 percent annual growth unless the Communist party makes up for the shortfall by boosting government investment.
In addition, Wu pointed out that engel’s coefficient can also tell whether a country has reached the level of affluence. The coefficient represents the proportion of food expenditure in total expenditure.
According to People’s Daily, China’s Engel’s coefficient has dropped from about 70 percent before reform and opening-up to 28 percent in 2019, indicating that the whole society has reached the level of “affluence”.
China’s official unemployment rate is undervalued
Still, Mr. Wu said, ‘Many of China’s data are based on embellishments or special calculations, and their credibility is questionable.’
For example, according to China’s National Bureau of Statistics, China’s surveyed urban unemployment rate has been falling this year, standing at about 5.3% in October, and unemployment has been gradually improving since the outbreak. But Wu Mingze thinks, this data is serious distortion.
“China’s unemployment rate can’t be 6 to 7 per cent, it should be at least 10 per cent, 10 to 15 per cent, I think it’s all possible because you can’t survey [migrant workers’ unemployment] exactly in rural areas like this,” he said. “This is the first one. Second, it is quite serious for a foreign businessman from the mainland to leave.”
Driven by the impact of COVID-19 and the desinification of global supply chains, if the scale and speed of foreign businesses’ exit from the Chinese market continue to increase, the impact on China’s employment market cannot be underestimated. According to Wu Mingze, the unemployment rate of high-end manpower above universities in China is relatively high, while that of grassroots manpower is still in shortage and the unemployment rate is relatively low.
Workers accompany masks at the Dongfeng Honda Assembly line in Wuhan, Hubei province. (8 April 2020)
At present, China has two types of unemployment rate data. One is the data of active registration of the unemployed, but the unemployment rate data is seriously distorted due to the low willingness of most people to register. The other unemployment rate is based on surveys conducted by government authorities in cities and towns, but only for the urban working population and does not take into account the vast number of migrant workers from the countryside who come to work in cities. Because, according to the Communist Party’s interpretation, migrant workers can lose their urban jobs but still return home to work, only transferring their status from “worker” to “farmer” and thus not counting as unemployed.
Widening wealth gap?
As for China’s wealth gap, Wang Changcheng, director of the Institute of Labor Economics at Zhongnan University of Economics and Law in Beijing, said China used to rely on a strategy of “some people getting rich first” to drive consumption, which led to a widening gap between rich and poor. Therefore, in the future, China will rely on expanding the middle income class to stimulate and drive consumption growth.
How to lift the middle class? Wang said the first is to increase its property income, and the second is to make it more market-oriented through the allocation of factors, including human resources, capital, technology and data, to make it more in line with the market situation, and encourage innovation to drive the increase of added value, so as to raise the income of ordinary people.
However, stock investment and real estate are the most fundamental items of wealth income for most Chinese people, but in terms of housing prices, another CASS report concluded that the myth of China’s rising property market has been shattered and the era of “only rising prices, not falling prices” is over. “This seems to pose a challenge to the potential future growth of property income for the Chinese people.”
Big data according to the institute of Chinese Academy of Social Sciences financial strategy housing project in early December issued by the China housing large data analysis report (2020), according to the existing 20 cities housing prices fall since its all-time high of more than 10% above, among them, contains six beijing-tianjin-hebei city (Beijing, tianjin, baoding, langfang, shijiazhuang, xingtai), three beibu bay city, beihai, fangcheng port, haikou), three cities of shandong peninsula (jinan, Qingdao, zibo), large bay city 2 (zhaoqing, qingyuan), chengdu-chongqing urban agglomeration in 2 (meishan and nanchong), the central city of two, western yunnan city 1, One city in central Guizhou.
As for China’s delayed retirement policy, which has been under discussion for more than a decade, it seems to be taking off this year.
Delaying retirement could spark public anger
In response, Wang said, this is mainly to cope with the financial pressure caused by insufficient pension provision.
“In addition to an ageing population and a slowly shrinking workforce, a very important reason for late retirement is that we are under increasing pressure to pay for pensions because life expectancy is increasing,” he said.
Wu Mingze of Taiwan’s Central Economics Institute agreed, saying that as life expectancy increases, people will retire later and receive fewer pensions. This is a global trend, and China is no exception. In China, he said, raising the retirement age will only slow down the rate of promotion, but he observed that the cadre class in the Chinese workplace is very young, so it shouldn’t be a problem.
However, he warned that the delay in retirement was bound to cause a great deal of public anger, such as Taiwan’s experience with the pension reform of military and public institutions.
Much of the chatter on Weibo, China’s twitter-like microblogging service, has been grumbling.
One user corrected: “Not retirement, but deferred retirement. It’s obvious to switch concepts.”
Another criticized: “This is human blood steamed bread… Why don’t we all give up and save for retirement?”
Another asked sarcastically: “Are interest groups going crazy to cut leeks? “
How China reforms its pension system in the future, it seems, will not only affect its fiscal health, but also pose a political challenge to stability.
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