The definition of the term middle class seem to be relative from one economy to another. Its relativity vary from one country to the other country depending on the average living standard of the country. The whole concept of middle class in economic terms imply the group of persons or entities in the economy that fall between the high class and the low class, and they are characterized by being economically independence (Dobbs, 13).
The middle class has less social influence and power when compared to the high class. The proportion of the middle class in the world economies vary from one country to the other depending on the level of equality that exist in respective countries and also their respective population size. The middle class stand at a position of taking the economic lead in the future compared low class.
The middle class normally have a significant role in an economy compared to the high class and the low low class. Most of the persons in the middle class are involved in investments that determines the country’s productivity in the future, compared to the low class that has less Investment impact following their unsound economic state. Otherwise, the low class normally involve much in trying to satisfy their basic needs. The high class persons seem to be have reached an optimal point for doing investments in the economy, thus their is less to be expected from them in enhancing improved productivity in the economy. More consumption of goods and services is also expected among the middle class persons than in the low class.
The paper is meant to compare and to contrast the reasons for the development of the middle class in India and China. It starts by first looking at the characteristics of the middle class in each country, draw some similarities in terms of the reasons of developing the middle class and then lastly provide the differences. The paper ends at providing a conclusion with regard to the general reasons for developing a middle class in some economy.
China and India are both characterized as being the currently fast growing countries, with China setting a record of growing at a double digit in the last decade. The countries are also characterized by having high populations. The characteristics for their respective middle classes are provided as below;
India
In India, the middle class has clocked 300 million and it forms the large part of the Indian population. The middle class of this country is characterized to be comprised of individuals who are ambitious in terms of education, behavior, financial achievements and also the professional achievements. There expenditure is also estimated to be to be higher than any other social class.
Reasons for developing the Indian middle class
The main problem in India is the need to create a political change and also the empowerment of the community. Therefore, the development of the middle class in India is meant to change the political structure of the country and enhance a reduced number of persons who are poor. The reducing of poor persons in the economy implies that the aim of developing the middle class is to enhance economic independence to a large population through the expansion of the middle class. Therefore, the main aim for developing the middle class in India is to enhance prosperity. The development of the middle class is also meant to enable food security in the country and empowerment of women. Food security issue follows from the large population of India that puts pressure on the resources in the process of trying to meet the food requirements.
China
The Chinese middle class has been significantly increasing over the time, and it mainly comprises the main target group for the consumer goods. The country’s middle class in 2005 was 65.5 million, where it grew to eighty million in 2007, and projected to hit seven hundred million in the year 2020. The expected increase in the number of middle class persons in China and an increase in their income level due to economic growth is likely to transform the Chinese consumer market.
The Chinese middle class in mostly concentrated in the urban areas compared to the rural areas. They are settled in the urban areas on the reason that, it is the place where there exists better jobs and also business opportunities. The business opportunities exist in the urban areas than in the rural areas following the fact that there is a high demand for goods in the urban areas because of its population size compared to the rural areas.
The middle class mainly comprises entrepreneurs and managers who are working in high technology companies, foreign and local financial institutions and also the self employed entrepreneurs. The middle class in china is regarded as being very important in the economy because of the significant purchasing power that provide the required demand for the goods and services in the economy.
Reasons for developing the Chinese middle class
The main reasons for developing the middle class in china is to increase the personal wealth that will enhance the financial institution to provide a wide range of financial products. Through the developing of the middle class, the companies that are operating in various sectors in the economy that include tourism, automotive among other sectors also are likely to experience business growth. Therefore, the development of the middle class can be regarded as being a strategy for enhancing business growth in the economy.
The proportion for private consumption is also likely to increase because of the increased purchasing power in the Chinese economy following the development of middle class, thus creating demand for the goods and services that are produced within the economy. The existence of the middle class in china is also meant to eliminate the wide wealth gap that exists among the Chinese population.
The similarity that exist in comparing the reasons for developing the middle classes in both countries is that they are all aimed at improving the welfare of the citizenry. The differences in terms of the reasons as to why they are developing the middle classes lies on the strategies that are taken to enhance improved welfare. For example, in Indian, they have taken the reducing of poverty, empowering of women, improving food security and enhancing political change as the reasons for developing the middle class.
All these are meant to enhance improved welfare. In the case for China, the approach is quite commercial, that is, the development of the middle class is meant to improve the purchasing power of the population. The improved purchasing power imply the enhanced demand for the goods and services, which mean that the companies in various sectors will have to expand their investments to meet the demand. The increasing of investments will create employment opportunities that are certain to ensure increased per capita income in the economy hence improved welfare.
In conclusion, the main reason for developing the middle class for any economy is to improve the citizenry welfare, and this is through increasing the economically independent persons in the economy.
Work Cited
Dobbs Lou. War on the Middle Class. Viking Publishers. 2006.
Hodgson An. China’s Middle Class Reaches Eighty Million. Euromonitor Archives. Web.
International finance Corporation. Force to be Reckoned with-India’s Middle Class in 2025. Web.
The Globalist. Growing Middle Class in India. Web.