Between 2006 and 2016, average incomes in China more than tripled from about $3,000 to $10,000 per year. According to McKinsey, 76% of China’s urban population will be considered middle class (defined as an urban household that rakes in $9,000- $34,000 a year) by 2022.
In 2000, just 4% of the urban population was deemed middle class. But by 2012, 68% fell into that bracket. Rising incomes and spending are underpinning China’s gradual transition from an economy based on exports and investment to one where consumption accounts for the lion’s share of GDP.
Meanwhile, average incomes in the UK are barely keeping up with inflation; in the US the real median wage is a mere 10% above its 1979 level.
Viewpoint
“There’s been no shortage of crazy taxes over the years. In the 17th century the Russian government announced a tax on beards, which would definitely raise a fair bit of money if… introduced in Shoreditch today. The 18th century saw English taxes on printed wallpaper as well as hats — with rich folk paying extra to have their heads covered. But when it comes to the all-time most stupid tax in British history, we’re living with it [now]. It goes by the name of business rates… a tax on commercial property – shops, pubs, offices and factories… what’s bonkers about business rates is that you fork out the same amount no matter if you’re a start-up with zero revenues or a vastly profitable and wealthy enterprise with millions in the bank. The only thing that’s looked at is the building you’re in… That’s a massive disadvantage for high-street stores versus online retailers, making it even harder for physical shops to compete.”
Rohan Silva, Evening Standard