Per capita disposable income in China surged nearly 60 times in 70 years, official data released by the National Bureau of Statistics (NBS) revealed, taking China closer towards becoming a higher income country.
Per capita income of Chinese citizens topped 28,200 yuan ($4030) in 2018, NBS stated in the report released last week.
China’s per capita disposable income in 1949 was nearly 49.7 yuan when the Communist Party of China (CPC) emerged victorious in the civil war and formed new China.
The increase in per capita income surged nearly 59 times between 1949 and 2018, after factoring in inflation, the report added.
The steady growth in income led to a continuous increase in consumption spending over several decades, fuelling economic growth in the last few decades, making China the second largest economy in the world.
“Chinese residents’ per capita consumption spending surged from 88.2 yuan in 1956 to 19,853 yuan (more than $2800) yuan in 2018, growing 28.5 times in real terms,” NBS data showed.
In 2018, China’s GDP hit 90 trillion yuan (about $13.32 trillion) and GDP per capita stood at $9,777, almost ten times that of 2001 ($1,000).
The latest data coupled with statistics released by the government earlier this year show that China is inching closer to become a high-income country.
“Despite the improvement, China remains a middle-income country according to the World Bank standards, with a Gross National Income per capita between $1,006 and $12235,” said a report published by the China News Agency earlier this year.
The road, however, will not be smooth as China’s economy has slowed down and the country’s trade war with the US has escalated.
This year will be crucial for China to avoid the “middle-income trap,” a term coined by the World Bank in 2007, said the agency report, adding that countries which find themselves trapped in it were more likely to face unstable politics, domestic market of low vitality, lack of technological innovations and changes caused by the external environment.
China is currently positioned around 70th in the global GDP per capita ranking and will continue to be a developing country even when it meets the threshold of a high-income country, as gaps between China and developed countries with a GDP per capita of $40,000 or $50,000 is still wide.