In search of the elusive Chinese urban middle class: An exploratory analysis

This paper aims to identify and characterize the Chinese urban middle class. We propose to improve the description of the middle class using an innovative approach combining an economic approach (based on income) and a sociological approach (based on education and occupation). The empirical investigations conducted as part of this research are based on the China Health and Nutrition Survey (2009). First, we define the middle income class as households with an annual per capita income between 10,000 yuan and the 95th percentile. On this basis, approximately fifty percent of urban households may be said to belong to the middle class. Second, we use information on employment and education to characterize the heterogeneity of the middle income class. Using clustering methods, we identify four groups: (i) the elderly and the inactive middle class, mainly composed of pensioners; (ii) the old middle class, composed of self-employed workers; (iii) the marginal middle class, composed of skilled and unskilled workers; and (iv) the new middle class, composed of highly educated wage earners in the public sector. We show that the different groups have distinctive features based on variables such as housing and household appliances and equipment.