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China aims to grow middle class to more than 50 percent of population by 2020
[December 26, 2007]

China aims to grow middle class to more than 50 percent of population by 2020

(Associated Press WorldStream Via Thomson Dialog NewsEdge) BEIJING_China hopes to grow its middle-class to more than half of its population by the end of the next decade, a Communist Party planner said Wednesday.

The goal is part of quadrupling China's per capita gross domestic product by 2020, said Zheng Xinli, vice minister of the Communist Party's Central Policy Research Office.

A bigger middle class will also challenge the government to provide greater social security and services and better education systems, Zheng said at a news conference.

"A growing middle-income population will ensure that more people will benefit from reform so that our reform will be endorsed and supported by more people," Zheng said.

Middle class is classified by the government as a family with a household income of between 60,000 yuan (US$8,000, 6,000) and 200,000 yuan (US$27,000, 19,000) a year, Zheng said.

Taking into account price changes, by 2020, just a little more than half of urban and rural families will be middle class, with 78 percent of urbanites middle class, he said.

"If this structure of income distribution is put in place, it will have a far-reaching impact on economic, social and political development in China," Zheng said.

Zheng did not give a figure for the current percentage of the population of 1.3 billion that is middle class. China's Academy of Social Sciences defines middle class as a household that earns 2.5 times China's average income. In 2006, it said that equaled about 4 percent to 5 percent of the total population, rising to 12 percent to 15 percent of the population in big cities.

China's economic development so far has come at excessive costs to its natural resources, Zheng said, adding that the economy was inefficient and polluting the environment.

The priority now is to move toward more sophisticated industries that use more science and technology and to foster entrepreneurs, he said.

The head of the government's top economic body was quoted Wednesday in the China Daily newspaper as saying the government had pressed provincial and local officials to curb investment and new energy-intensive projects in order to rein in growth and inflation.

Since opening up its economy in 1978 and moving toward a market economy, China has lifted about 400 million people out of poverty, according to the World Bank.

But this has led to wide income inequalities that the Communist Party is trying to address through its notion of a "harmonious society" that has a more even distribution of the benefits of recent decades of speedy economic growth.

The World Bank says there are 137 million poor in China, measured as those who consume less than US$1 (0.69) a day.

Zheng said continued development will eliminate "absolute poverty" by 2020, but he did not give details of this definition. The Chinese government's official poverty line is about 70 U.S. cents (.49) cents a day.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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