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China strives to expand its middle class

China hopes its middle class will expand to more than half of its total population by 2020, a Communist Party planner said Wednesday.
/ Source: The Associated Press

China hopes its middle class will expand to more than half of its total population by 2020, a Communist Party planner said Wednesday.

The goal is part of quadrupling China's per capita gross domestic product by 2020, said Zheng Xinli, vice minister of the Communist Party's Central Policy Research Office.

A bigger middle class will also challenge the government to provide greater social security and services and better education systems, Zheng said at a news conference.

"A growing middle-income population will ensure that more people will benefit from reform so that our reform will be endorsed and supported by more people," Zheng said.

Middle class is classified by the government as a family with a household income of between $8,000 and $27,000 a year, Zheng said.

Taking into account price changes, authorities project that by 2020 a little more than half of the country's families will be middle class, and 78 percent of those will be living in cities, he said.

"If this structure of income distribution is put in place, it will have a far-reaching impact on economic, social and political development in China," Zheng said.

Zheng did not give a percentage for the country's 1.3 billion people that are considered middle class. China's Academy of Social Sciences defines middle class as a household that earns 2.5 times China's average income. In 2006, it said that equaled about 4 percent to 5 percent of the total population, rising to 12 percent to 15 percent of the population in big cities.

China's economic development so far has come at excessive costs to its natural resources, Zheng said, adding that the economy was inefficient and polluting the environment.

The priority now is to move toward more sophisticated industries that use more science and technology and to foster entrepreneurs, he said.

The head of the government's top economic body was quoted Wednesday in the China Daily newspaper as saying the government had pressed provincial and local officials to curb investment and new energy-intensive projects in order to rein in growth and inflation.

Since opening up its economy in 1978 and moving toward a market economy, China has lifted about 400 million people out of poverty, according to the World Bank.

But this has led to wide income inequalities that the Communist Party is trying to address through its notion of a "harmonious society" that has a more even distribution of the benefits of recent decades of speedy economic growth.

The World Bank says there are 137 million Chinese who live in poverty, defined as those who consume less than $1 a day.

Zheng said continued development will eliminate "absolute poverty" by 2020, but he did not give details of this definition. The Chinese government's official poverty line is about 70 cents a day.