Chinese incomes surge by nearly 60 times in 70 years, says new data
The per capita disposable income of Chinese citizens surged nearly 60 times in 70 years, latest official data has revealed as China moves closer towards becoming a higher income country from a middle-income one.
The data was released in a report by Chinese National Bureau of Statistics (NBS) last week.
China’s per capita disposable income in 1949 was nearly 49.7 yuan when the Communist Party of China (CPC) emerged victorious from the civil and formed new China.
It topped 28,200 yuan ($4030) in 2018, the Chinese national bureau of statistics (NBS) said in the report.
The increase between 1949 and 2018 saw a surge of nearly 59 times factoring in inflation, the report added.
The steady income growth over the decades led to a continuous increase in consumption spending, fueling the economy as it grew rapidly in the last few decades to become the second largest in the world.
“Chinese residents’ per capita consumption spending surged from 88.2 yuan in 1956 to 19,853 yuan (more than $2800) yuan in 2018, growing 28.5 times in real terms,” NBS data showed.
The latest data coupled with statistics released by the government earlier this year show that China is inching closer to become a high-income country.
The road, however, will not be smooth as China’s economy has slowed down and the country’s trade war with the US has escalated.
In 2018, China’s GDP hit 90 trillion yuan (about $13.32 trillion) and GDP per capita stood at $9,777, almost ten times that of 2001 ($1,000).
“Despite the improvement, China remains a middle-income country according to the World Bank standards, with a Gross National Income per capita between $1,006 and $12235,” said a report published by the China News Agency earlier this year.
This year will be crucial for China to avoid the “middle-income trap,” a term coined by the World Bank in 2007, said the agency report, adding that countries which find themselves trapped in it were more likely to face unstable politics, domestic market of low vitality, lack of technological innovations and changes caused by the external environment.
“If China sticks to reform and opening-up policies, the country will maintain stable economic growth,” Cai Zhizhou, deputy director of the China Centre for Economic Research at Peking University told the news agency.
Additionally, GDP per capita is not equal to per capita disposable income; measures such as cutting taxes are needed to increase the overall disposable income of Chinese citizens and promote the growth of domestic demand to drive economic development.
China is currently positioned around 70th in the global GDP per capita ranking, Cai said. “China will continue to be a developing country even when it meets the threshold of a high-income country, as gaps still exist between China and developed countries with a GDP per capita of $40,000 or $50,000,” Cai said.