Agence France Presse

Beijing, March 30 :

Nearly one fifth of China’s population of 1.3 billion is now categorised as belonging to the middle class, widely seen as the bedrock of any successful capitalist society.At the end of 2003, 19 per cent of all Chinese were characterized as middle class, up from 15 per cent in 1999, the Xinhua news agency said, citing the Chinese Academy of Social Sciences (CASS), the nation’s top think tank.

“Prices on property and food are low in China,” said Andy Xie, China economist with Morgan Stanley in Hong Kong. “This is why so many people fit into the category in China.” The figure was based on the academy’s standard, which counts a person as a member of the middle class if their family has assets of between 150,000 and 300,000 yuan ($18,000 and $36,000).

With growing house and car ownership a growing number of Chinese city dwellers have moved into the middle class and now make up 49 per cent of the country’s urban population, according to the think tank.

Given the current pace of growth -- where the proportion rises by one per centage point each year -- China’s middle class population could make up close to 40 per cent of the total in 2020, Xinhua said. Foreign companies have been pouring billions of dollars into the Chinese economy with the middle class consumer in mind, hoping for one of the biggest emerging markets in world history for anything from diapers to camcorders.“The figure is useful (for foreign companies) because they can sell their products to these people -- but they have to sell at Chinese prices,” said Xie of Morgan Stanley. Official statistics suggesting a steadily growing middle class is matched by other figures reflecting rising affluence in the cities.China said it reached a milestone last year when disposable income among its urban residents rose above the 1,000-dollar mark for the first time ever. The emergence of a middle class in China reflects seismic shifts in society that would have been unthinkable without the past 20 years of reform, according to the Beijing Business Today newspaper.

Since the authorities loosened social controls to ensure a more mobile labor force, 130 million rural dwellers have settled down in the cities, the newspaper said. “We believe that it will take the migration of at least another 200 million farmers to the cities before China has genuinely become a middle class society,” Li Peilin, a CASS researcher, said according to the newspaper.

The growth of the middle class is welcome news for China’s leadership, which puts maintenance of social stability on top of its agenda. The Beijing Business Today held up the prospect of an “oval-shaped” society in 16 years’ time, with a large number of people in the middle, having moderately generous incomes, and only few very rich or very poor.

But some social scientists have questioned the official way of dividing people into different classes, saying it fails to catch the reality of life in modern China. Neither education nor income are entirely reliable indicators of where a person is located in modern Chinese society, they said.