East Asia’s middle class shows its worth
Jan 13 2014
The new East Asian “tig-ers” Taiwan, Hong Kong and Singapore followed suit. Then South Korea managed the ascent into the exclusive OECD club that includes the world’s most advanced economies. A few years ago the People’s Republic of China overtook Jap-an as the world’s second lar-gest economy and it will be well before the middle of this century that China will become the world’s largest economy ahead of the United States of America.
A central part of the many East Asian economic miracles is the ascent of a large middle class. This is particularly impressive in the case of China. At the time of the death of Mao Zedong and the end of the so-called “cultural revolution” China was amongst the poorest countries in the wor-ld, in many ways even poorer than India at that time. Today, less than 40 years later, arou-nd 25 per cent of the total po-pulation of China — some 350 million people — are considered to be middle class. Half of the urban population falls into this category and as Beijing intends to raise the urbanisation rate to 70 per cent by 2035, a further massive expansion of the Chinese middle class is to be expected.
This development is seen by many as a purely economic issue. However, the consequences of the emergence of a strong middle class reach far beyond the mere material issues of economic and technological progress. The members of a rising and ambitious middle class have ever new aspirations which, once basic needs are covered, soon become political.
On the surface China seems at present to be able to ward off profound political reforms. However, it is evident that particularly amongst the urban middle classes people are not anymore satisfied with economic progress alone. They strive for issues that have to do with the quality of life like environmental protection, consumer rights, free information and the rule of law.
Every year a number of think tanks issue surveys on political stability in the world at large. This time the survey of the Economist intelligence unit caused quite a stir. There are six countries listed as having “very low risk” of social unrest in 2014. Five of these countries are small European states, the only major country being Japan. Hong Kong, Malaysia, Singapore and Taiwan rank in the category of “low risk”. In the group “medium risk”, which comprises India, we find Indonesia, Thailand and South Korea. China, which is seen by many as an upcoming super power, figures among “high risk”, where we also find Spain and Portugal. There can be disputes about the validity of all the criteria that are taken into account when making these rankings. However, it is important to notice the big gap for example between China and Japan.
The rise of East Asia is of huge importance to the world and in particular to the world economy. What happens in this part of the world has an important impact on other regions and continents, both in a positive and in a negative sense. It is, therefore, essential to study the developments that can cause disruptions and upheavals. It is the Chinese leadership, which repeatedly has criticised the rampant corruption as a threat to the stability of the system. If it is not tackled properly and if other challenges like inflation and a rapidly growing wealth gap are not mastered in good time, the rule of the Communist Party could come to a violent end. After all, China has a long tradition of dynastic change.
There can be no doubt that most governments in East Asia have been successful in opening up their economies and that the economic elites in these countries have contributed a fair share to the continuously improving living standards of ever bigger segments of the population.
This is particularly impressive if one looks at the records of other regions and continents. A generation ago Argentina and even Pakistan were much richer than South Korea! Today they trail far behind. Beyond this remarkable record it is now essential to modernise East Asian societies so that they are capable and ready to deal with the challenges that are part of the reality in advanced countries.
It is not surprising that Japan leads East Asia when it comes to social stability. Japan was the first Asian country that entered the industrial revolution in the late 19thcentury. century. The Meiji restoration that facilitated this progress was not only concerned with economic modernisation, but also gave high importance to reforms in politics, the legal system, education and research. Particularly China will have to undertake great efforts at emulating such an enlightened approach. If it fails, social instability will increase and the repercussion of widespread unrest would not only be felt in the middle kingdom but in the whole of East Asia and in the world beyond.
(The writer is far east correspondent of Neue Zurcher Zeitung (Swiss daily in Tokyo)