I: Concept, function and scope of the middle class

The emergence of the concept of the middle-income group and its impact on the development of Chinese society

Li Chunling

In 2002, the slogan "Raise the proportion of the middle-income group” was first proposed in a report titled "Build a Well-off Society in an All-Round Way and Create a New Simation in Building Socialism with Chinese Characteristics” at the 16th Party Congress. Since then, official documents from the Party and government have frequently emphasized the crucial role that expanding the middle- income group plays in building a moderately prosperous society in all respects. In October 2015, it was clearly pointed out at the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China that the 13th Five-Year Plan period would be the decisive stage in the completion of building a moderately prosperous society in all respects. At the 13 th meeting of the central finance and economy leading group in May 2016, General Secretary Xi Jinping emphasized that “The expansion of the middle-income group is essential to realizing the goal of building a moderately prosperous society in all respects. It is a requirement for shifting the growth model, for improving the economic structure, for maintaining social harmony and stability, and for enjoying enduring peace and stability.” These remarks underscore that the increase of the proportion of the middle- income group is a key index for measuring the success of building a moderately prosperous society in all respects. It is predicted that after ushering in a moderately prosperous society in all respects, the middle-income group will come to represent the major group in society. For these reasons, "raising the proportion of the middle-income group” was included in China’s 13th Five-Year Plan.

However, the Chinese academic community has yet to form a clear consensus on how to define the concept of a middle-income group, and there is a great deal of debate on precisely how it should be demarcated. The lack of a clear definition for the middle-income group and a method for measuring it presents a difficulty for achieving the goal of "raising the proportion of the middle-income group”, as without these it is impossible to propose any quantifiable objectives or specific policy schemes. Consequently, for public policy considerations, establishing a clear definition and criterion for classification of income groups, and proposing specific, quantitative objectives for “raising the proportion of the middle-income group”, are all urgent concerns. Refining the policies and plans of expanding the middle-income group will require taking several measures: It will be necessary to crystallize the definition and classification standard of the middle-income group.

investigate its constitutive characteristics, and predict its growth trends. These steps will allow policies to be aimed at targeted poverty alleviation, which in turn will contribute to targeted middle-income group enlargement.

At the same time, further exploration of the practicality and theoretical meaning of the concept of the middle-income group is needed in the field of academic research. Many people believe that the “middle-income group” is only a slogan- esque concept proposed by Chinese govermnent leaders for policy-making (such as in the phrases "raising the proportion of the middle-income group”, "strengthening middle-income group”) But in fact, before the word "middle-income earners” appeared in Chinese government documents in 2002, social scientists abroad had already used this concept to analyze income distribution and social composition changes. At present, the term “middle-income group” is frequently referenced in research reports of international organizations (such as the United Nations (UN), the World Bank, or the Organisation for Economic Co-operation and Development (OECD)), well-known think tanks, and some academic works discussing income distribution and social structure changes. However, it is a relatively new concept in the social science field when used as a concept for the classification of social groups, and thus lacks in-depth practicality and theoretical meaning.