China Newsweek’s last issue focused on China’s “disappearing” middle class. Leave it to China to mis-characterize or misinterpret a particularly strange phenomenon — the rise in the cost of living in big cities like Beijing and Shanghai.
The gist of it goes like this: The middle class — which includes small business owners, business/financial people, journalists — is struggling to survive in Beijing, where housing prices are jumping 50 percent in a matter of months. They are spending almost their entire monthly household income on rent or to pay off their apartments, the down payments of which they had to use their parents’ entire life’s savings to pay for. They have little money left for discretionary spending, so no more movies or shopping sprees. It is also harder for recent college graduates (who are expected to become middle-class residents) to become middle class.
Middle-class citizens can no longer afford to buy homes in big cities like Beijing, even after saving for forever, so the middle class must be disappearing! This extraordinary leap in logic can be partially explained by the Chinese obsession with homeownership. Sure, it’s a “goal” and a measure of success in the States, as well, but in China, it’s practically the end-all, be-all. On top of that, the Chinese think the ultimate measure of success is a life in the big city — no other city will do.
Oddly enough, a family moves to Hefei, the capital of Anhui Province, and by all measures, their lifestyle seems satisfactory: decent home, friends, quality goods. But the husband still feels “awkward” about it. Why? Hefei is a “secondary” city — and with terminology like that, no one is going to feel good about living there.
So basically, the Chinese put huge pressure on themselves to buy apartments in the big cities, and the huge demand is making housing prices unaffordable. They want homes in the city so badly that they’re literally spending every last mao they have to buy one and then cry that they can’t do or buy anything that middle-class people are supposed to be able to do or buy.
If they were Americans, they’d just do and buy it anyway on credit and rack up a huge debt. But at least they wouldn’t have this identity crisis where they don’t even think of themselves as middle-class anymore.
These Chinese, they don’t know how good they have it. Try living in Brooklyn! The financial crisis has made living there reminiscent of the Holocaust!