In the United States and China at the moment, the middle class is under threat — and it’s a major problem to both countries for different reasons.
In China, there is increasing concern about the growing gap between the very rich and the very poor. The Chinese government has stated its intention to drive the economy to be centrally based on domestic consumption rather than export-driven, in order to grow the size and wealth of the middle class and ensure better social harmony.
However, the latest data suggest that consumer spending as a percentage of GDP is actually shrinking – not growing. Latest figures for 2010 suggest private consumption was 34% of GDP, down from 47% a decade ago.
Eric Jackson is Forbes contributor.
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