Ben Wray: How the explosion of the Chinese middle class will change the West

Common Weal head of policy Ben Wray explores why a friend of his has better prospects as a teacher in China than in Scotland's public sector

A GOOD FRIEND of mine is leaving Glasgow next month to move to China. I had never even heard of the city she is moving to, but it turns out that Heifei has a population about the size of London, at just under eight million people.

She is a teacher who has just finished her probation year. The kids (who by all accounts loved her) were the only thing she enjoyed about it – she was overworked, under-resourced, had unhelpful management insensitive to the challenges she faced and had to work within a constricted system that was too focused on teaching to the test. And the pay was hardly great to compensate.

So she had a choice. More of that (with the possibility of not finding work where she lived), or take another direction. She loves education theory and thought about doing a Masters, but she has no rich parents to pay the fees. So she started looking beyond Scotland and came across an opportunity in little known, huge Heifei.

Her story will not be the last time Scotland loses a skilled worker, desiring to work in the public sector for the common good but frustrated by austerity, to the lure of a new, more lucrative and more liberated life in the far east.

The opportunity was to work at an American-owned private school teaching middle class Chinese kids. She could help design the course. She would be paid more than she could get close to earning at a school in Scotland, with the expectation of more if she shows longevity, and with smaller class sizes. 

She wouldn’t have to pay rent or for her car. Her boyfriend (a nurse) has been able to get a job at the same school, teaching English on account of a Teaching English as a Foreign Language (TEFL) course he took a few years back.

Her story will not be the last time Scotland loses a skilled worker, desiring to work in the public sector for the common good but frustrated by austerity, to the lure of a new, more lucrative and more liberated life in the far east. In fact, it could become the new normal.

If you don’t know about the explosion of the Chinese middle class, it is time to learn. It isn’t just reshaping China - it is set to reshape the world. The numbers are eye-watering. In 2002, just four per cent of urban China had incomes equivalent to the average in Italy. In 10 years that number had risen to 68 per cent. In numerical terms, that is significantly bigger than the whole US middle class.

But it doesn’t stop there. The upper middle class – those with plenty of income to spend on non-essential consumer goods – is surging from a small minority of the total Chinese middle class to become, by 2022, the biggest section.

This upper middle class section – three times bigger than the baby boomer generation that motored consumer capitalism in the west - is the most attractive for, and attracted to, Westernised capitalist living. They want to consume top brands, they want the best holidays and they want elite education.

That means western brands, western holidays and western education.

This includes private schools like the one my friend will teach at, which rose to 5.9 million in 2012, a 43 per cent rise from 2004, and expected to continue to rise rapidly. 

Perhaps the majority of these are upper middle class Chinese parents seeking a westernised education for their kids as a status symbol and to give them an advantage in the jobs market. It also sets them up well for when they pay big money to send their kids to UK universities (a trend that has risen by 60 per cent since 2009/10)

Within this upper middle class section, McKinsey’s research has identified a group it calls G2: a generation in their late teens and early 20s of about 200 million people. Unlike their parents, they have never experienced grinding rural poverty and do not have the same values of saving money.

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"They are confident, independent minded, and determined to display that independence through their consumption ... research has shown that this generation of Chinese consumer is the most westernised to date," McKinsey states.

This is the dialectic of uneven development at work: because western capitalism was the first to go global through the British and then the American empires, utilising cheap resources and cheap labour in the global south to grow its own wealth, it has set the global cultural and financial footprint. 

China’s rapid ascendency marches in the tread marks of the west, and thus the old world is given the opportunity to live off the advance of the new.

China’s rapid ascendency marches in the tread marks of the west, and thus the old world is given the opportunity to live parasitically off the advance of the new.

But just because western companies may benefit from the explosion of the Chinese middle class, it doesn’t mean western countries will. Many of these companies produce their goods in China so that they can be produced cheaply and sold to us with a higher profit margin. 

If the same companies use cheap Chinese labour to produce, and Chinese middle class purchasing power to sell, where do we fit in? Plus, as the Chinese domestic market grows, working class living standards  will likely rise as well, pushing up the cost of all those cheap imported clothes and toys we purchase in the west.

Furthermore, if an army of skilled workers like my friend start to go to the far east as living standards stagnate in the west, we could suffer the sort of brain drain that has for so long gone from east to west. China has now largely stemmed the losses of its university educated population to the US and Europe which was a chronic problem in the early 2000’s.

Some imagine a future where the UK is able to compete with China once again on equal terms, i.e. the super-exploitation of factory workers in Tianjin and Guangzhou is matched in Birmingham and Dundee.

In 2015, Tory Health Minister Jeremy Hunt defended cuts to working tax credits based on the basis of the need for a culture shift in work towards the China model. 

The only hope for economies like Scotland’s is to maximise our educated population by investing in high-wage, high-skill, high-productivity jobs in industries that can make us more self-sustaining.

He said: "My wife is Chinese. We want this to be one of the most successful countries in the world in 20, 30, 40 years’ time. There’s a pretty difficult question that we have to answer, which is essentially: are we going to be a country which is prepared to work hard in the way that Asian economies are prepared to work hard, in the way that Americans are prepared to work hard? And that is about creating a culture where work is at the heart of our success."

This is farcical (as well as sinister). Britain has no chance of competing in a race to the bottom with emerging economies. One boss of a garment-making company which produced labels for River Island in the UK revealed in an undercover sting that he paid his workers £3 an hour because if he paid them £6 or £10 he couldn’t "compete with China or Bangladesh". Such is the logic of Hunt’s dystopian dream.

The only hope for economies like Scotland’s is to maximise our educated population by investing in high-wage, high-skill, high-productivity jobs in industries that can make us more self-sustaining and at the cutting edge of technological development, like renewables and advanced manufacturing.

This requires a dynamic and thriving state willing to intervene to change the economy – something the Chinese know only too well.

Picture courtesy of DaiLuo

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Comments

MauriceBishop

Mon, 07/17/2017 - 15:27

"frustrated by austerity"

Education is fully devolved. If the SNP want to pay and treat teachers better they can do so.

"a dynamic and thriving state willing to intervene to change the economy"
That you think central command and control is the way forward for Scotland is terrifying.

Ben Wray's picture

Ben Wray

Mon, 07/17/2017 - 15:52

Your ability to miss the point is quite impressive, Maurice. Any thoughts on the substance of the article?

MauriceBishop

Mon, 07/17/2017 - 20:08

What is the substance of this article?
1) One person you know chose to have an adventure abroad for a while. This is not a tragic loss for Scotland.
2) That China is huge and growing in prosperity is not news. That you think China is a land of liberty comes as a bit of surprise, but I guess that goes hand-in-hand with your admiration for central planning.
3) You set up your conclusion with a silly strawman argument. You take a comment about the idea of hard work in Asian and American culture and claim that what it really means is factory work at slave wages. As if you didn't hear the "American" part, as if you are unaware that Japan, Korea and Singapore are all in Asia.
4) And then you conclude with the typical Common Weal endorsement of central planning. Scotland has been, under the guise of "investing in renewables", handing public sector funds to private corporations for the past 10 years. What is the track record? How many of them have actually delivered even half the number of jobs that were promised at the the time of the press release? How does that compare to the number of them that failed completely sometime after the private corporation walked away with the money?

Ben Wray's picture

Ben Wray

Tue, 07/18/2017 - 12:02

Well, at least you have made a bit more effort to engage Maurice, albeit a snarky one. 

  1. My point is it could be start of an emerging trend as the Chinese middle class expands rapidly, unless western economies make themselves more attractive for skilled workers to stay by raising incomes and reducing the standard of living. I thought that was obvious.
  2. Where did I say China was a land of liberty? Again you miss the point. China is a hugely oppressive society, it just happens to be playing an increasingly influential role in the world, including changing Western societies.
  3. I wouldn’t want a work culture like any of those countries. Long hours of work in American and far-east cultures are extremely unhealthy. And Hunt did make a direct comparison with China. My point is that the idea that Britain’s economic future is trying to compete in a race to the bottom is ludicrous. 
  4. Hard to know where to start with this. Common Weal is not for central planning, it is for a decentralised participative democracy model. A dynamic and thriving state doesn’t have to replicate the Chinese model. I know right-wingers like you find it difficult to imagine any other model than either repressive centralised state or hyper-capitalism, but that is your problem not mine. I’ll leave the anti-renewables whinge to one side, other than to say most governments have been intelligent enough to know that supporting the renewables sector to take off is a major strategic advantage long term, the UK has fallen behind other countries because of its failure to do this, instead wasting billions on the likes of Hinkley point c.

MauriceBishop

Tue, 07/18/2017 - 15:12

1) When your friend returns after a year saying "that was fun but I wouldn't want to live there" will you write a new piece declaring that the threat was passed?
2) "the lure of a new, more lucrative and more liberated life in the far east"
3) Describing the American and Chinese cultures with the same simplistic lazy label is bad writing and lazy thinking.
4) I'm not anti-renewables. I'm anti the unrecoverable transfer of public sector funds to private corporations with nothing in return, no matter what the industry sector. You need to leave the SG's track record "to one side" because it is terrible. And it will continue to be terrible, because politicians and the people whose well-paid jobs depend upon the continued support of politicians make the decisions.

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