Interview

by Malcolm Riddell

1

1 | 'Middle Class Shanghai: Reshaping U.S.-China Engagement' by Cheng Li

CHINADebate

Malcolm Riddell
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Founder of CHINADebate

&
July 25, 2021
1 | 'Middle Class Shanghai: Reshaping U.S.-China Engagement' by Cheng Li
1 | 'Middle Class Shanghai: Reshaping U.S.-China Engagement' by Cheng Li
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Cheng Li

Director, Brookings Institution, John L. Thornton China Center

1

BIG IDEA | ‘Among the many forces shaping China's domestic transformation and its role on the world stage, none may prove more significant than the rapid emergence and explosive growth of the Chinese middle-class.’

Malcolm Riddell: ‘Cheng, why is it important to understand China’s growing middle-class?’

Cheng Li: ‘Among the many forces shaping China's domestic transformation and its role on the world stage, none may prove more significant than the rapid emergence and explosive growth of the Chinese middle-class.’

‘A growing number of Chinese citizens - currently estimated between 400 and 500 million - enjoy a middle-class lifestyle with private property, personal automobiles, improved health care, accumulation of financial assets, and the ability to afford overseas travel and foreign education for their children.’

  • ‘They live like the middle-class, consume like middle-class, feel like middle-class, and they are middle-class.’
  • ‘They have already transformed China's socioeconomic structure and the world economy.’

‘In Shanghai, as of 2018, over 5 million households shared this lifestyle and could be considered middle-class families, constituting 91 percent of the total registered households of the city.’

  • ‘In 2020, per capita GDP in Shanghai already exceeded U.S.$23,000.’
  • ‘According to a 2019 report by the People’s Bank of China, almost all registered families in Shanghai owned residential property,, with a significant number of families owning two or three properties.’
  • ‘The average value of household assets among Shanghai residents was 8.07 million yuan (U.S.$1.2 million).'

‘In 2002, 40% of China's middle-class live in four cities; Beijing, Shanghai, Shenzhen and Guangzhou. The rapid expansion of the middle-class has gradually extended beyond these megacities.’

  • ‘According to McKinsey, by 2022, the proportion of China’s middle-class that resides in second- and third-tier cities will reach 76%.’

With trillions of dollars to spend, the Chinese middle-class is a huge market for foreign businesses.’

  • ‘In fact, Western business groups earlier than anyone else – whether academics, journalists, or policy makers - identified the Chinese middle-class.’
  • ‘They saw how profoundly the middle-class changed China's economic structure and the global economy.’

‘China's the middle-class development has a wide range of implications for every domain of a Chinese society: economic roles, political stability, social cohesion, environment protection, and the culture changes.’

  • ‘On the international front, the emerging Chinese middle-class has already begun changing the ways in which the PRC interacts with the outside world, for better or worse, by expanding Chinese socioeconomic outreach and soft-power influence.’

‘I hope that the people in the United States will have a thoughtful intellectual and policy debate about the role and the implication of the Chinese middle-class as you and your signature platform, CHINADebate, wisely call for.’

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Interview

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Malcolm Riddell
|

CHINADebate

Cheng Li
|
Brookings
&
|
1

1 | 'Middle Class Shanghai: Reshaping U.S.-China Engagement' by Cheng Li

‘Among the many forces shaping China's domestic transformation and its role on the world stage, none may prove more significant than the rapid emergence and explosive growth of the Chinese middle-class.’
7/25/2021

CHINADebate

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Cheng Li
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How China's Middle-Class China is Transforming China and the World

‘Among the many forces shaping China's domestic transformation and its role on the world stage, none may prove more significant than the rapid emergence and explosive growth of the Chinese middle-class.’
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2 | ‘My Humble Effort’

‘My book, Middle Class Shanghai, is a humble effort to provide a different angle, based the cultural and the educational fronts, from the perspective of shared middle-class lifestyles, aspirations, concerns, and values.’
7/25/2021

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3 | The ‘Haipai’ - ‘Jingpai’ Divide

‘Just as New York and Washington are profoundly different from each other, the same can be said about Shanghai and Beijing.’
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Cheng Li
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4 | The Shanghai Paradoxes

‘Middle-Class Shanghai actually reveals China's unsettled future because Shanghai embodies what I call two tales of a city. Now in my view, Shanghai was, is, and will be paradoxical.’
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5 | 'It is premature to say that engagement has failed.'

‘It is premature to conclude that the U.S. engagement policy with China under the eight presidents prior to the Trump administration has failed.’
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As the Chinese Communist Party begins its second century, it’s useful to identify enduring patterns that might aid us in understanding China today and the directions it might be heading.
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Tony Saich
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Harvard Kennedy School of Government
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From Rebel to Ruler: One Hundred Years of the Chinese Communist Party by Tony Saich

‘In our discussions, you've identified five themes that have been more or less consistent throughout the history of the party but have oscillated between different points on a continuum:’
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'Forget about China': Clyde Prestowitz

Clyde Prestowitz has influenced U.S. foreign trade and investment policy for many decades, both inside and outside government.
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'Regime change in China is not only possible, it is imperative.'

‘We must make regime change in China the highest goal of our strategy towards that country.’ ‘The US and its allies cannot dictate to China the political system by which it is governed. But they can and must engineer conditions which embolden and enable those in China who also want regime change to achieve it.’
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Mike Lampton
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School of Advanced International Studies, Johns Hopkins University (SAIS)
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‘But what's happened now is that Southeast Asia is rich enough to contemplate such infrastructure and that the Chinese have the technology, money, and high-speed rail industry so that they can both finance or help finance and build it.’
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Shang-Jin Wei
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Columbia University
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Why China's Economy is Growing Faster than Others

‘First is China's relatively aggressive and decisive measures on the COVID public health crisis itself that managed to get the pandemic under control much faster than the other large economies.’ ‘The relative success in controlling the pandemic translates into how much people are willing to go back to their normal lives, to their jobs, and the like.’
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Joerg Wuttke
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European Union Chamber of Commerce in China
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The Chinese Communist Party Fears Ending Up Like the Soviet Union

‘The propaganda ministry - within four to six weeks - managed to turn China into a problem for Europeans. China’s standing in Europe is eroding by the day.'
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Tony Saich
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Harvard Kennedy School of Government
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The Party is Infallible

'The Hong Kong demonstrations can never be because of policy mistakes by the Communist Party itself.’ During our interview, Tony Saich of the Harvard Kennedy School told me: ‘Hong Kong, with its responses to the demonstrations, and the Coronavirus are both illustrative examples of how the culture of the Communist Party and the traditions it's built up over almost a hundred years reflect the way it behaves when it's confronted by certain crises.’
5/13/2020

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Craig Allen
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U.S.-China Business Council
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‘The good news is that 80% of our members said they thought the Phase One agreement was a good thing.' 'But only 19% said it was worth it.' 'What the 80% said they are happy about was that there no more new tariffs were coming immediately.’
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Bonnie Glaser
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Center for Strategic and International Studies (CSIS)
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'It would not be accurate to say China claims the entire South China Sea as its sovereign territory because the Chinese are unclear about what exactly their claim is and what it is based on.'
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Federal Reserve Bank of Richmond
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‘This is a crisis where the first chair is held by the public health officials, and the second chair is held by the fiscal authorities. We at the Fed have the freedom to be able to move relatively quickly, but we're the third chair here, trying to help out where we can.’
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Bill Overholt
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Harvard Asia Center
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‘Both Trump and Xi have a fundamental political divide problem that the COVID-19 epidemic has exposed and made more apparent – and made substantially worse.’
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