{"id":20111,"date":"2015-07-15T07:00:48","date_gmt":"2015-07-15T12:00:48","guid":{"rendered":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/short-reads\/%year%\/%monthnum%\/%day%\/china-india-middle-class\/"},"modified":"2024-04-14T03:46:00","modified_gmt":"2024-04-14T08:46:00","slug":"china-india-middle-class","status":"publish","type":"short-read","link":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/short-reads\/2015\/07\/15\/china-india-middle-class\/","title":{"rendered":"China\u2019s middle class surges, while India\u2019s lags behind"},"content":{"rendered":"\t\t\t
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China and India both succeeded in slashing poverty in the decade from 2001 to 2011. But while that contributed to a rapidly growing middle class in China, it did little to increase the number of Indians who could be considered middle income, according to a new Pew Research Center analysis<\/a>.<\/p>\n\n

From 2001 to 2011, the share of Chinese who are middle income jumped from 3% to 18%<\/a>. But the share of Indians who are middle income was almost unchanged<\/a>, inching up from 1% in 2001 to 3% in 2011, the latest year for which data are available.<\/p>\n\n

Shanghai\u2019s gleaming skyline and the ubiquitous \u201cMade in China\u201d tag are among the visible symbols of this economic divide. According to International Monetary Fund data<\/a>, China is now the world\u2019s largest economy, producing 16% of all goods and services, whereas India accounts for only 7%. As recently as 1991, China and India each accounted for about 4% of global output. The two Asian neighbors, while both demographic giants, appear to be on different trajectories.<\/p>\n\n

\"A<\/a><\/figure>\n\n

The Pew Research study, which covered 111 countries, divided people in China and India into five income groups: the poor (who live on $2 or less daily), low income ($2.01-10), middle income ($10.01-20), upper-middle income ($20.01-50), and high income (more than $50). These figures are expressed in 2011 purchasing power parities<\/a> and 2011 prices. In annual terms, the middle-income range translates to an income of $14,600 to $29,200 for a family of four.<\/p>\n\n

The one shared achievement between the two countries was their success in cutting the poverty rate. From 2001 to 2011, the poverty rate in China fell from 41% to 12% and the poverty rate in India dropped from 35% to 20%. That moved 356 million Chinese and 133 million Indians out of poverty, or 489 million people in total. This is almost three-quarters of the number of people that emerged from poverty globally.<\/p>\n\n

China was more successful than India in pushing its population closer to a middle-income lifestyle. The transition out of poverty resulted in an increase in low-income Chinese, with their share in the population rising from 57% in 2001 to 66% in 2011. But the share of middle income grew by even more, from 3% to 18%. Also, the share of China\u2019s population that is upper-middle income or high income climbed from less than 1% to 5%.<\/p>\n\n

By contrast, the transition out of poverty in India mainly resulted in an increase in the share of its low-income population, from 63% in 2001 to 77% in 2011. The middle-income share rose only from 1% to 3%, and about 1% of India\u2019s population is estimated to have had an upper-middle-income or high-income standard of living in 2011.<\/p>\n\n

China has pulled away from India in part because it initiated economic reforms in the late 1970s, more than a decade before India launched its own reforms in 1991. China\u2019s economic reforms are also seen as deeper and more far-reaching<\/a>, resulting in superior trade and investment outcomes<\/a>.<\/p>\n\n

But this is not necessarily unmitigated good news for China. Research shows that rising prosperity in China is going hand-in-hand with rising inequality<\/a>. There is also concern about a stock market bubble in China<\/a> and what it might mean for the country\u2019s near-term economic future.<\/p>\n\n

On the other hand, there is guarded optimism<\/a> that India may push further forward economically under its new government. Other estimates<\/a> of the size of India\u2019s middle class suggest that it may account for between 5% and 10% of its population. (Although these estimates use the same $10 threshold for entry into the middle class as the Pew Research study, they extend it to encompass people living on as much as $50 per day and also draw on other data sources.) But for the moment, a sizable gap remains between the economies of China and India.<\/p>","protected":false},"excerpt":{"rendered":"

China and India both succeeded in slashing poverty from 2001 to 2011. 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