Income Mobility in China

In China’s olden days, as in the West’s, it took more than money to rise in class. Today, money is virtually the only measure of status, in Chongqing as surely as in Chicago. So, idealistic political arguments aside, a good measure of a country’s freedom can be found in how easily or frequently its people can transcend the income levels of their parents, communities, or peer groups.

It doesn’t take an Ivy League researcher to conclude that, since China’s economic renaissance in the 80s, the proportion of Chinese living in abject poverty has significantly decreased, while the proportion enjoying lifestyles of the rich and famous has correspondingly spiked. Less utopianly, only a quarter of China’s rural majority graduate high school, let alone sit for college exams, aggravating an economic divide that Zhongnanhai sees as its chief obstacle to national harmony.

Sometimes, it does take an Ivy League researcher to shake us from our assumptions. A 2007 Cornell study claimed that income mobility for China in the 1990s was greater than America’s and other high-income countries’. It also confirmed the obvious with some hard numbers – 53% of Chinese living below the poverty line in 1981 versus 8% in 2001, and a Gini coefficient increase from 0.31 to 0.447 during the same period (a good thing).

The study also employs terms like “coefficients” and “quintiles”, putting one in mind of a remedial college statistics lecture. What’s a right-brained but curious Sinophile to do? Take to the streets, naturally, and ask the Everyman, if not every man, how he views his chances of making it rich in China. The news is good for prospective foreign employers – of twenty surveyed, fourteen mentioned working at a foreign company as their conception of a ticket to wealth and happiness. Here are a few of the most representative responses.

Li Na, 23, job-hunting college graduate

My parents live in Liaoning. They are comfortable, but don’t have a modern lifestyle, and worry about their retirement years. Life here in Beijing is much more stressful, but I believe I have a good chance to live a better life than they did. I don’t believe I’ll ever be rich, unless I am lucky and marry a millionaire! If I can work in an international company, I will be quite content, because I will earn a good salary, enough to take care of my parents. Also, I will have some security and benefits.

Hua Anguo, 49, taxi driver

I’m making much more money than my parents ever did, which is no surprise. I’m also making more than the people I grew up with back in Luoyang. But Beijing is very expensive, and I am rather uncertain about my son’s chances to rise in life. He is only thirteen, but already I can see that his chances of success are tied to his success in school. He is only an average student, so he probably won’t go to a very good high school. With my low level of education, I will have to work very hard to make sure that both my wife and he can be comfortable. I know a few people where I now live who have started small businesses, restaurants or repair shops, that kind of thing. I’m afraid I don’t have the temperament for that kind of thing. So yes, it is now easier to make more money in China, but you have to make more!

Xiao Ye, 24, hair salon worker

I’m from Hebei. I didn’t finish school, and there is hardly any work there, so I moved to the city and was lucky to find this job. The hours are long, but we are all friends and it is only busy a few hours every day. I thought when I started, maybe I could save my money and study for a hairdresser’s license. Just living in the city, though, having decent clothes, a cell phone, and not appearing too poor, takes all of the little money I make. Oh, I do take back a little bit of money when I go to visit my family on holidays. But my earlier idea of starting my own hair salon, that is finished. To live in the city is to know that we outsiders are viewed quite unfavorably. Good opportunities are scarce, and the well-connected always get them first. I would need years of savings and a high reputation to open a hair salon that would make me rich. Realistically, I don’t see that happening.

Harry Wu, 31, financial analyst [interviewed in English]

Well, yes of course I can see income mobility as greater for my generation, the next generation, so on. Education improves, and we all move to better international standard workforce. I am lucky to find work in a foreign financial firm, though. The pay of course is higher level, even if more and more Chinese financial firms and investment banks, but still the foreign company has best chance for me to go ahead.

By the standards for average Chinese person, I am well off. I have bought a townhouse in Beijing and drive a foreign car. However, I can see that I am really not rich when compare to my colleagues and bosses! Still, I feel fortunate. If I can continue to work hard, learn, make value for my company and clients, I can reach a level that anyone will consider as “rich”.

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