China's State Information Center also anticipates a total of 200 million new middle class people in the next 5 years.

Andy Xie said in his research report last week, that China's imminent entry to the World Trade Organization and the hosting of the 2008 Olympics will be anchors for stability and reform this decade.

He says that the middle class should be distinguished not just by capita income alone.

He suggests that the only way for China to become a middle class country is to bring down cost of being in that category.

"In the United States, to be middle class, you need an income of at least 20,000 US dollars, because everything is a lot more expensive. In other countries like Malaysia, you also need to have high income, because what you want to buy is often made in other countries. So you have to pay international prices. While in China, because it's so large and can leverage cheap labor to produce the things that the middle classes want. So actually, the cost of being middle class in China could be substantially lower than in other countries."

According to Mr. Xie, the middle class is a group of people who own cars, and for whom food and shelter are not primary considerations. Their main considerations are property ownership and leisure, for example traveling.

And Mr. Xie estimates that in China today, about 50 million people can be generally considered middle class or on the way there very soon. Then who else has the potential to join the ranks? Andy Xie explains.

"Mainly the coastal region, 490 million people. A key is the government housing policy... The property price has been brought down a lot, and it could be brought down further. That's how most people could afford properties. And over the next ten years, ... the only way forward is to make housing affordable. And that will happen."

However, Andy Xie says two important efforts are necessary to help people on their way to being middle class.

"The housing price may need to come down by another 20 or 30 percent in many of the cities; the second is to invent a car that sells only for US$5,000 or less, which is entirely possible. Technology is not a problem at all. It's the commercial thing that the automobile manufacturers are not embracing this concept. So the people in the eastern sea board could join the middle class very soon."

(China Radio International07/30/2001)