China's Middle/Upper Class. A Lot Richer Than The Official Statistics Indicate.
Fascinating post (graph, really) over at China Tells, entitled, "The Mystery of China’s Grey Income." The post discusses a recent academic study finding household income in China is actually double that which is officially reported and for those earning at the top 10% of Chinese society, the real income is 2.2 times that which is officially reported.
What this means in business language is that the Chinese consumer usually targeted by Western companies actually has more to spend than you probably thought.
Check it out and let us know what you think.
Comments (3)
Read through and enter the discussion by using the form at the endRenaud - July 31, 2010 10:35 PM
When the National Bureau of Statistics estimates Chinese household’s income, they'd better avoid working on the basis of tax collection data.
In Chinese small and medium companies, few well-paid employees declare their real salary. The company often declares around 2,000 RMB, which is a threshold below which no income tax is due (and social insurance is also very low at this level of income).
And let's not even mention the income of business owners... Even they often don't know how much they really earn!
Jean - August 1, 2010 7:22 PM
If I understand correctly, the real income of the top 10% is 3.2 times the income officially reported. You have to add the "official" income to the grey income 2.2 times larger. This can be seen from the graph : official income are around 40 000 RMB, Wang's study around 140 000 RMB.
Be careful of statistics ...
gregorylent - August 4, 2010 7:33 PM
counting the number of high-end dslr's that walk through my neighborhood in shanghai everyday, this HAS to be true ... huge bucks around here