By Yang Xiuna, China Development Research Foundation

Research Report, No.95, 2019 (Total 5595) 2019-6-19

Abstract: Income growth and the change of income distribution are two major factors affecting the proportion of middle-income social groups. In recent years, the increase of the proportion of middle-income groups in China is mainly due to the rapid growth of residents’ income rather than the change of income distribution. If the annual median income of 67% to 200% taken from more than 200 countries in the world are set as the ceiling-floor benchmark of China’s middle-income groups, the proportion of the groups rose from 10% to 20% from 2002 to 2007. The income growth contributed about 90% and the change of income distribution about 10%. The proportion rose from 20% to 27% from 2007 to 2013, with 87% of the increase contributed by income growth and 13% by the change of income distribution. To further expand the proportion of middle-income groups, we need to be fully aware of the necessity of maintaining a mid-to-high economic growth based on a sound-quality development. While focusing on improving the income of low-income social groups, it is also necessary for us to prevent the limited number of middle-income groups who have just become middle-income earners from sinking back into low-income groups due to the decline of income.

Key words: middle-income social groups, income increase, change of income distribution