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China's middle class is starting to look a lot like America's, and that's not a good thing

Added 12-07-21 12:14:02am EST - “Rising levels of household debt, unaffordable homes, and a risk of falling out of the middle class ?" wait, is this the US or China?” - Businessinsider.com

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Posted By TheNewsCommenter: From Businessinsider.com: “China's middle class is starting to look a lot like America's, and that's not a good thing”. Below is an excerpt from the article.

In 2000, roughly 3% of the country's population was classified as middle class. By 2018, more than half of China's population — 707 million people — had entered the country's middle-income bracket, according to calculations from the Center for Strategic and International Studies that defined the middle class as those spending between $10 and $50 a day.

As China's middle class has expanded, it has in many ways also started to look like America's. In its most recent middle-class analysis, the Pew Research Center in 2016 classified 52% of the US population as middle class. (Methodology for defining the middle class varies, but many experts — including Pew — define the middle class globally as those who live on $10.01 to $20 a day per person, which straddles the poverty line in the US.)

And while the growth of China's middle class is a good thing — those 707 million people have risen out of poverty, after all — some of the similarities it now shares with the US are distinctly less positive.

Max Zenglein, chief economist for the Berlin-based Mercator Institute for China Studies (MERICS), told Insider China's middle class will soon face very similar challenges to the US and European middle classes: "Wage growth is not strong enough to make it easy for them to afford their dreams."

"It's very difficult to move upward, but there is a risk for them to move down, and that's something new," Zenglein said of China. "They might be hitting a ceiling."

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