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Managing China’s Middle Income Aspirations

Business, China, Company Strategy, Economics
By John Richardson on 15-Apr-2013

Finding a way through….


Traffic in Shanghai. Picture: Rex Features


By John Richardson

WHEN the blog first visited China in the late 1990s, it travelled around Beijing in a fruitless and naive attempt to get people to really talk about everyday life.

Last week was the complete opposite during our visit to Beijing and Shanghai. People initiated conversations with us (and fortunately for the mono-lingual blog, many more people spoke English than in the late 1990s. This is a great indication of how open China has become. It is also an example of the immense hard work and initiative of hundreds of millions of Chinese as they learn English and take first degrees and advanced degrees in an effort to compete both locally and globally. They put some complacent Westerners to shame).

How hard life has become was a dominant theme in conversations with fellow coffee drinkers and diners, with service-sector workers and with chemical industry contacts.

As we discussed last week, when quoting some of the people we talked to, there is growing resentment over income inequality and the environmental crisis

Remarkably, people were willing to talk about politics. Anger at corruption was to the fore, which was linked to a sense that life has become unfair – i.e. that success is not related to ability, to ingenuity and to hard work, but rather to the right kind of connections.

Doubts were also expressed over the ability of government officials, particularly local government officials, to deal transparently and competently deal with the latest bird-flu scare.

And there was deep cynicism over the state-run media and the government’s obvious, but for the time being pretty effective, controls over the Internet, which are detailed in this excellent special report by The Economist.

It is important to note that we were only talking to the “middle classes” in China’s two most-developed cities, or more accurately middle-income earners. How representative such views are of the overall China, we of course, have no idea. People’s hopes and aspirations in the developed eastern coastal regions are likely to be vastly different from those living in under-developed western China.

We have, equally, no fixed views on where China in general is heading as it attempts to deal with all of its social and economic challenges. This is far too complex for a “one size fits all” set of answers that are hard-baked into scenario planning.

The debate needs to continue.