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Last Updated: Monday, 11 October 2004, 13:02 GMT 14:02 UK
China's middle class revolution
In the first of a major series on change in China, Tim Luard reports on the country's growing middle class.

After one of the fastest periods of economic growth in history, China is set to reclaim its place as one of the world's great powers.

And the communist government, which once despised such displays of wealth, is counting on a new middle class to help it succeed.

Student David Zhang
I used to want to move to the US and have a beautiful house with green grass in front of it. But now I think this kind of thing can be achieved in China
David Zhang, student

As part of reforms first launched in 1978, it has welcomed capitalists into the ruling party and jettisoned Marxism and Maoism in favour of what it calls Socialism with Chinese Characteristics.

Making the most of foreign trade, investment and technology, it sailed past its ambitious target of quadrupling gross domestic product in 20 years.

In the booming eastern cities there is a confidence and energy in the air - thick as it is with the dust from countless building sites - that suggests plans for a further quadrupling over the next two decades are well on course.

By then - or somewhat later, depending on whose methods of measurement you trust - China will have overtaken the United States to become the world's largest economy, thus regaining a position it held for much of human history.

Others maintain that this will not happen until around the middle of this century, and point out that in either case, China will still be well behind the US in per capita terms.

"Everything is possible these days," said student David Zhang, who has just returned to the mainland after a visit to Hong Kong.

"I used to want to move to the US and have a beautiful house with green grass in front of it. But now I think this kind of thing can be achieved in China, in my own culture."

Greater freedom

Tina Yang, a 23-year-old trainee in a foreign company's Beijing office, said she was more than happy to face the challenges - and reap the rewards - of China's new, competitive environment.

Sitting over a cappuccino in a gleaming shopping mall, she said the reforms had changed more than just the way people live, eat and dress.

Jeff Qiang (right) and his fiancée Ada
China's middle classes are ambitious for the future

"In the past people obeyed the rules and the government. Now we can have our own ideas and our own say... even if it may not have much effect," she said.

The Communist Party still brooks no opposition. But its new ideology embraces private enterprise, private property and almost anything else that will help make China richer and stronger - and keep the party in power.

Far away in the booming western city of Chongqing, the new Japanese-style management methods used by Yin Mingshan in his motorbike factories have made him a millionaire several times over.

Although he said China was "raising its cultural level" by learning from abroad, he believed the country's dramatic growth had been fuelled not just by hard work and low wages but also by a strong sense of nationalism.

"For 100 years we suffered in poverty as Western countries pressured and invaded us. Now there's been an explosion of growth as people use their power and intelligence to build a new strong China," he said.

Mr Yin started by copying foreign motorbikes, but he and others like him are now innovators. Already this year his company has applied for 700 patents, he said.

US rival

The multinationals who are falling over each other to produce goods of all kinds in China - not just for export but also for the burgeoning domestic market - are allowed in on condition their hosts can learn as well as make money from them.

"The Chinese want to absorb our technology and make everything by themselves, " said Masanori Fuji, whose Japanese firm produces telecoms equipment in eastern Zhejiang province.

If we continue to pursue the current reforms we will have a massive middle class, with more accountability and a more open and tolerant civil society
Steven Xu, economic consultant

"They are already overtaking Japan in semiconductors," he said.

China's East Asian neighbours are coming under growing pressure from the United States Government not to let their companies give away too many hi-tech secrets, he said.

But leaders in Beijing are quick to deny that China wants to rival the US.

"Our philosophy... is to have a win-win situation for all," said Foreign Ministry spokesman Liu Jianchao.

"We'd like to co-operate, not compete," he told BBC News Online.

The official aim is to achieve a "well-to-do society" by 2020, with a per capita income of five times the present one of about US$1,000.

"That's a sensible goal," according to Steven Xu, a mainland-born and based economic consultant.

"We're not talking about a standard of living comparable to the West, but if we continue to pursue the current reforms we will have a massive middle class, with more accountability and a more open and tolerant civil society.

"If China can succeed in this," he said, "it would be a shining example for other developing countries and a tremendous contribution to mankind."

There are plenty of drawbacks and exceptions to the economic miracle as it now stands. These will be looked at in later articles in this series.

But first, a final example of communist China's new bourgeoisie and its hopes for the future.

Jeff Qiang seems less intent on China's status in the world than on arranging the stereo system and soft furnishings in his new luxury Shanghai flat.

He and his fiancée Ada will be moving in once they are married in a few months' time. For now they just spend the odd weekend there, getting everything right.

But after a couple of Budweisers in a local restaurant, he was asked what he and his young friends really thought about China's phenomenal economic growth.

"I know one day we will be the greatest power in the world," he said seriously. "We all believe that."


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