Showing posts with label Evan Osnos. Show all posts
Showing posts with label Evan Osnos. Show all posts

Monday, March 11, 2013

The China middle class debate

Is China having a middle class? Yes, it has, but how large is it and is it a useful group to target if you want to sell your products on the China market? Leading opinion leaders on China differ fundamentally about this issue, and it is about time to put those differences in the limelight. Here the arguments by +Helen Wang , +Shaun Rein , +Wei Gu and Tom Doctoroff.
Initially, following Weber, the middle class was the group of people between the working class and the upper class. But especially in the US much of the working class started to consider themselves also to be middle class too, and sometimes for good reasons. But it has made the label 'middle class' a difficult one. (A thorough overview of the historical development of the definition here at Wikipedia .)

Two schools of thought exist in this China debate. One group sees the existence of a Chinese middle class as a no-brainer. While the Chinese middle class might be defined in different economic terms than the US middle class, some estimate it already to be as high as 600 million.
A second school disputes that assumption; they say money can be made at the rich and ultra-rich in China, but the middle class is at best a very thin, too thin layer between those rich and the majority of relatively poor. And even worse: China's focus on improving minimum wages for the working class, and less at improving the position of the middle class.

In the middle is Evan Osnos who uses a OESO definition for the middle class in The New Yorker:
A decade later, Chinese politics have not achieved that goal. The Chinese middle class— defined by the Organization for Economic Cooperation and Development as those with the means to make spending decisions beyond just subsistence—is almost certainly growing: it is now about ten per cent of China’s population, and on pace to be forty per cent by 2020. But when it comes to politics, the Chinese government risks losing the support of the middle class.
Using that definition still does not mean the Chinese middle class can buy the same products as their US counterparts, even though the costs of living in China's larger cities have matured over the past decade, and move upward even more.

The debate is both financial and political. Defenders of the middle-class theory in part looked mainly at financial criteria for the middle class in China compared to the US because (at least in the past) the costs of living in China were lower than in the US, they argued. Their opponents believe you should look also at the ambitions of the Chinese consumers. Unlike the average American consumers, Chinese do not want to be middle class. They want to be filthy rich, even when they know they might not be able to achieve that ambition all.

Whether or not there is a substantial middle class has profound consequences for marketing efforts by both Chinese and foreign companies in China. When you are selling Lamborghini's, private airplanes or yachts, the middle class is not interesting. But how looks the market for other products?

Let's give the word to the two different schools.

The Middle Class School

JWT's Tom Doctoroff clearly believes in a large and vibrant middle class, as he states in the first half of this clip:

On his side, we also find Helen Wang, author of the bestseller "The Chinese Dream: The Rise of the World's Largest Middle Class and What It Means to You. In Forbes she tried to start a debate on defining the middle class, and is more optimistic than Evan Osnos:
In The Chinese Dream, I use a combination of these definitions: urban professionals and entrepreneurs from all walks of life, who have college degrees and earn an annual income from $10,000 to $60,000. Over three hundred million people, or about 25 percent of China’s population, met these criteria in 2010.
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Wednesday, November 28, 2012

From subjects to citizens - Howard French

Howard
Howard French


Journalist Howard French documented in his much praised Shanghai photographs a fast changing society. Evan Osnos of the New Yorker interviewed French on his "Disappearing Shanghai: Photographs and Poems of an Intimate Way of Life".

Howard French:
In your notes, you write about the “dreams of prosperity.” How are those dreams changing in China? 
The dream has indeed changed in vital ways. Money and opportunity are still very big parts of what drives urbanization in China, and I think the poor and the weak must still pay enormous costs to achieve prosperity. When I first arrived in Shanghai, in 2003, there were still frequent roundups of improperly documented migrants, meaning people without a Shanghai residence permit. They were put on trains and buses and sent back to their provinces, and sometimes, if they were caught two or three times coming back to the big city, they were fined and detained and treated harshly. That sort of thing is almost unheard of now. Something bigger has changed, though, and will continue to change. Perhaps it is the biggest source of change in China overall. To be specific, that is the spreading and deepening of the notion of citizenship. Even the most ordinary city-dweller has begun to think in new ways about what he assumes to be his rights. The earlier migrants, and indeed most Chinese until a fairly recent point in time, lived more or less as subjects. Now people are quick to complain in terms of rights and injustice, and they invoke the law and band together, albeit loosely, on this basis. It would seem to me that a trend like this can only grow, especially given the exploding availability of information and universal means of communication, beginning with the cell phone.
More in The New Yorker.

Disappearing Shanghai by Howard French

Howard French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

How is Google+ doing in China? According to the latest figures the number of Google+ users increased from 0.9% to 3.6% of its internet users. Still pretty low compared to other countries, but growing. On Thursday 29 November the China Weekly Hangout will hold an open-door meeting to discuss the current situation of Google+ in China. You can read more here, or register at our event page here. Or you can join us at both pages on 10pm Beijing time, 3pm CET (Europe) or 9pm EST (US/Canada)\


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