Opinion | Why Beijing has no cause for celebration if it reaches the threshold of high-income country
- The living standards for a great majority of Chinese cannot justify being labelled ‘high income’, as 600 million people still live on a monthly income of 1,000 yuan (US$157)
- China’s economic decision makers, including Vice-premier Liu He, have made it clear that the middle income trap will remain a real threat in the foreseeable future
China’s per capita GDP this year is set to exceed US$12,000, approaching or even exceeding the World Bank threshold for a high-income country at US$$12,696. This is likely to revive the debate over whether China should be seen as a rich or poor country.
The implications could be serious. For many years, China has positioned itself as a “developing” country, and insisted that its status may not change until the middle of this century. The self-perception of being a developing country is the starting point for many of China’s domestic and foreign policies.
There will be pointed questions asked at home if China becomes a “high income country”, such as “Why am I still poor when my country is rich?”
The living standards and welfare for the great majority of Chinese people simply cannot justify being labelled “high income” – there are still 600 million people living on a monthly income of 1,000 yuan (US$157) or less.
The Chinese government has started to respond to the changes, putting “common prosperity” at the top of the agenda, after eliminating “absolute poverty”.
