News portal the 21st Century Business Herald editorializes that expanding China's middle class could boost consumption and expand domestic demand. The reason why the official department proposes the planning on expanding middle-income group is that there are some challenges middle-income group meets.
The department of employment and income distribution of the National Development and Reform Commission held a seminar recently discussing how to do so, and is preparing a planning paper on the subject.
Overcapacity and high leverage have subdued the middle-income group's wage growth. They are beset by a range of taxes, and must contend with rocketing housing prices, which have sharply reduced their consumption ability.
What's needed is to adjust the economic structure and develop high-end service and manufacturing, the editorial says. Avoiding inflation is another important solution. China's middle-class could effectively become a low-income group if surging house prices shrink their purchasing power.
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