It has always been a challenge to find out the income and wealth situation in China due to the country’s complicated social and economic landscape. But there are growing signs that wages have stagnated nationwide, or even started to decline in certain sectors, threatening Beijing’s efforts to boost consumer spending.
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To be sure, headline income figures published by the Chinese government still paint a rosy picture.
According to the National Bureau of Statistics, China’s per capita disposable income in the first half of 2024 rose 5.4 per cent from a year earlier to 20,773 yuan (roughly US$3,000). The income growth was on a par with the nation’s nominal economic growth rate and far higher than consumer inflation, showing that people’s living standards and spending power continued to improve.
However, anecdotes on the ground and other official data show a different scene. The Chinese finance ministry, for example, published data showing that personal income tax revenues in the first half dropped 5.7 per cent compared with a year ago. Since China had not rolled out any income tax cut, the fall in tax revenues directly reflected shrunken income for the country’s wage earners.
Chinese social media are filled with stories of salary and job cuts. The abrupt lay-off of over 1,000 employees at IBM in China is just one recent example of widespread job losses at foreign businesses. Multinationals with a presence in the world’s second-largest economy going back decades, from car manufacturers to pharmaceuticals, are scaling down their local operations.
