China Insights

True face of China’s `Middle Stratum’

Sophie Shen

Former General Manager of CTR Media & Consumption Behaviour

Consumer Shoppers 17.09.2013 / 00:00

Middle stratum

If China is increasingly divided by wealth gaps, what does the "middle stratum" look like?

As early as in 2010, then Chinese Premier Wen Jiabao published a well-known article in which he announced that "(Chinese government) should increase the income of middle-income people and establish an 'olive-shape' wealth distribution system (in China) where the majority are middle-level income earners." From 2003 to 2012, per capita GDP of China grew by six times, but wealth gap expanded even faster. China's society has become increasingly divided by wealth gaps, which would inevitably hurt China's healthy and sustainable growth in social and economy aspects. To reverse the trend, it's pivotal to know the true face of China's "middle stratum." 

"Middle stratum" is different from "middle class." The conventional concept of "middle class" is defined by a person's economic, political, social and cultural conditions. Middle class population in developed countries not only enjoy well-off and comfortable lives, but also actively participate in political and social issues. In comparison, "middle stratum" is more defined by one's economic condition.

We identify the middle stratum population in China not by considering one's income only. We adopted the Socio-Economic Levels model of CNRS database. This model includes 12 variables closely related to income and we categorize Chinese population based on their different situations on the following four aspects: education level, residency situation, durable goods consumption and commercial service consumption. SEL divides all Chinese urban population into four levels, ie: Level 1 (Top 10 percent), Level 2 (Next 20 percent), Level 3 (Next 30 percent) and Level 4 (Next 40 percent). We combine the second-highest level and middle level into "middle stratum," while highest level will be the elite and lowest level is the bottom-level of Chinese urbanites.

Middle stratum decreases from east to west

The data shows that middle stratum accounts for 50 percent of all urban population of China. Geographically, the penetration rate of middle stratum and local economic development level are found to be highly positively associated. There are four different levels across China: the proportion of middle stratum population is highest in south China where it is above 60 percent; followed by east and north China where both are above 50 percent; central and southwest China reach 40 percent while the lowest is in northwest and northeast area whose readings are only 37.4 percent.

Mixed values but quality consumption behaviour   

Middle stratum lies in between the elites and the bottom of the society, so inevitably their lifestyle and consumption philosophy are more or less influenced by both. On one hand, they still carry out traditional values from the grassroots; on the other hand, they start to adopt some modern ideas of elites. Their values are mixed: their mindsets are traditional and contemporary; they spend in lavish and thrift ways; they make impulsive and rational buying decisions.

They start to pay attention to the products they buy. They begin to drink breakfast milk, wash their hair with both shampoo and conditioner, and use mouthwash when brushing teeth. When choosing brand, they are more loyal supporters of domestic brands than elites. For example, in automotive consumption, elite buyers are buying fewer Chinese-branded models while middle stratum buyers are purchasing more.

Prefer relaxing TV entertainment, lifestyle magazines

Even though TV rating and newspaper readership have been declining because of the challenges from new media contents, its well established influence still persists. In terms of choice of media channel, 54.9 percent of middle stratum agree that "Brand appear on TV gives me good impression," while 22.3 percent agree that "Brand appear in newspapers gives me good impression" - much higher than other media.

TV program wise, middle stratum prefer entertainment, news and feature programmes, with more than 91.9 percent of them watching entertainment. Satellite TV channels which are strong in entertainment programmes, such as Hunan Satellite, Jiangsu Satellite and Zhejiang Satellite, are enjoying a growing reach among middle stratum audiences.

In middle stratum consumers' eyes, magazines used to be sources of information and knowledge, but now they read magazines that fit their life taste. Health, travel, auto and fashion magazines which represent high-quality lives are gaining grounds among these readers, while digest and personal emotional story magazines are losing subscribers.

Younger and harder 

China's middle stratum are younger with an average age of 37.9, compared with UK, France and US, where middle class' average ages are all above 40. But at the same time, life is hard for China's middle stratum - in 77.5 percent of these families, both husbands and wives are full-time employees, while this index is only about 40 - 50 percent in developed countries. Facing the high pressure of life and competition, China's middle stratum people work harder - 44.6 percent of them say they're willing to sacrifice their time with family for a better career development. However, they're also very confident for their future. Among them, 46.8 percent said they "prefer to enjoy my current life rather than worrying for the future."

Source: CTR

Editor's notes

Journalists, for more information on China's 'middle stratum' please contact us.

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