Social Stratification and Household Consumption in China

1. Social Economy Development Social Stratification and their Household Consumption

2. Standard • Normal and abnormal • Legal and illegal Finns good good bad bad Legal 1=restrictive drink-driving laws Legal 2=restrictive immigration laws Legal 3=consistently making use of a friend at the telephone exchange to make free international calls Legal 4=drug traffic Legal 1 Legal 2 Legal 3 Legal 4 good bad good bad Spaniards Richard D Lewis, When cultures collide: managing successfully across cultures. London: Nicholas Brealey publishing,1996, p36.

3. Outline • 1. Introduction • 2. Social Stratification in China mainland • 3. Household Consumption in China mainland • 4.Discussion

4. 1. Introduction • What society has China? Socialism with Chinese characteristics

5. 1. Introduction According to Karl Max（1818-1883） • Primitive society • Slave society • Feudalism society • Capitalist society • Socialist society • Communist society Chinese characteristic socialism with various economic composition Social Stratification Public ownership of the production means Distribution according to need

6. Outline • 1. Introduction • 2. Social Stratification in China mainland • 3. Household Consumption in China mainland • 4.Discussion • 5.Assignment

7. Socialist transformation in 1958 Founded in 1949 Reform and opening up in 1978 • State-owned economy Confiscated Left • Private owned economy Purchased • Sino-foreign economy Protected Protected 2. Social Stratification in China mainland 2.1 Social economy • Foreign economy • Bureaucrat capitalism economy • State-owned economy • State-owned economy Purchased • Private owned economy (weak) • Private owned economy • Foreign economy • Feudalism economy • Individual economy Confiscated • Farmers and handicraftsman • Individual economy • Collective economy • Collective economy Outward-oriented economy withcoexistence of various economic composition Market economy Internal-oriented public-owned economy Planed economy

8. 2. Social Stratification in China mainland • There are two kinds of social Stratification theories: • conflict theory (benefit conflict) • function theory (Stratification division has its own rationality) • Based on job categories, Chinese Academy of Social Science divided social Stratification by the amount of the organizational resource, economic resource and cultural resources they occupied. 2.2 Social Stratification

9. Upper class Upper-middle class Middle-middleclass Lower-middle class Lower class 2. Social Stratification in China mainland 2.2 Social Stratification Managers of State and Society Professionalmanagers Private enterprises owners Professional technical personnel Common staffs Individual industrial and commercialhouseholds Commercial and service sector employees Industrial workers Agriculturalworkers Unemployed and semi-unemployed

10. 2. Social Stratification in China mainland 2.2 Social Stratification • In 2010, the wealthiest 10%of the urban population earned a per capita income of 56,435.17 yuan annually, more than 2.6 times of the average, while the poorest 10 percent earned only 6703.70 yuan, less than one-third of the average (21033.42 yuan). China statistical annual 2010

11. 2. Social Stratification in China mainland Harmonious society wish in Olympics opening ceremonies 2008

12. 2. Social Stratification in China mainland 2.2 Social Stratification 2 1 3 4

13. Outline • 1. Introduction • 2. Social Stratification in China mainland • 3. Household Consumption in China mainland • 4.Discussion • 5.Assignment

14. 3. Household Consumption in China Mainland Urban consumption structure of 2010 China statistical annual 2010

15. 3. Household Consumption in China Mainland 3.1 Food consumption Engel's Coefficient The proportion of expense on food to the consumption expense. Engel's law When income rises, Engel‘s Coefficientfalls, even if actual expenditure on food rises. Engel's Coefficient and Living Standard* * Food and Agriculture Organization of UN

16. 3. Household Consumption in China Mainland 3.1 Food consumption Grain Coupons before the reform Adult: 12 kg/month Middle school students and employee: 13.5 Kg/month Heavy manual labor: 15Kg/month

17. 3. Household Consumption in China Mainland 3.1 Food consumption Sugar Coupons before the reform Meat Coupons before the reform Meat:250g/month Sugar: 200g/month Cooking oil Coupons before the reform

18. 3. Household Consumption in China Mainland 3.1 Food consumption Today, all kinds of food can be bought by money. In 2009, China's agricultural exports amounted to 39.17 billion U.S. dollars.

19. ￥ 60,000~75,000 (1984) ￥ 160,000~220,000 (2004) ￥ 30,000~50,000 ￥ 60,000~80,000 (2003) 3. Household Consumption in China Mainland 3.2 Transportation & communication Family cars purchase increases the expenditure on transportation . Traffic jams < Auction price

20. 3. Household Consumption in China Mainland 3.2 Transportation & communication Shanghai Metro network 2010

21. 3. Household Consumption in China Mainland 3.2 Transportation & communication

22. Beijing: constructing more wider roads . 3. Household Consumption in China Mainland 3.2 Transportation & communication

23. 3. Household Consumption in China Mainland 3.2 Transportation & communication Beijing Metro network 2010

24. 3. Household Consumption in China Mainland 3.2 Transportation & communication Beijing Metro network 2012

25. 3. Household Consumption in China Mainland 3.2 Transportation & communication Obtaining license plates by drawing lots

26. 3. Household Consumption in China Mainland • First class passengers: 60% • Second class passenger:44% • Third class passenger: 26% 3.3 Recreation, Education and Culture Articles The preference are the first class and the women and children of the second class.

27. 3. Household Consumption in China Mainland 3.3 Recreation, Education and Culture Articles China social Stratification Statistical Analysis shows: Social status and class are inherited significantly.

28. 3. Household Consumption in China Mainland • She hauls her then-7-year-old daughter's dollhouse out to the car and tells the kid that the dollhouse is going to be donated to the Salvation Army piece by piece if the daughter doesn't master a difficult piano composition by the next day. • She informs her daughter that she's "garbage“. • “an A- is a bad grade; “ • The only activities her children should be permitted to do are those in which they can eventually win a medal. 3.3 Recreation, Education and Culture Articles

29. 3. Household Consumption in China Mainland 3.3 Recreation, Education and Culture Articles

30. 3. Household Consumption in China Mainland 3.3 Recreation, Education and Culture Articles • She displayed her personality so directly in a modest society. • Social pressures lead to the depression of the civilian population. • People feel boring when there are too many beautiful faces are crammed in TV, films and magazines. • …… Fu Rong Jiejie

31. 3. Household Consumption in China Mainland 3.3 Recreation, Education and Culture Articles Feng Jie Arguments on low taste/frivolous entertainment. Xili Ge

32. Develop the cultural industry as a new economic growth point In too much frivolous entertainment, people tend to lost. 3. Household Consumption in China Mainland 3.3 Recreation, Education and Culture Articles

33. 3. Household Consumption in China Mainland 3.4 Clothing consumption if the Chinese people's overseas spending on luxury goods is counted, China has already overtaken Japan as the second largest luxury goods consumer in the world, only after the United States. Bain & Company , Luxury Goods Worldwide Market Study, 2011.

34. 3. Household Consumption in China Mainland 3.5 Residence consumption Group-oriented leasing Old memory of Shanghainese

35. 3. Household Consumption in China Mainland 3.5 Residence consumption In city ,the land ownership is belong to the state but the use right and buildings on it can be sold or bought in market. The most stubborn nail family in history

36. 3. Household Consumption in China Mainland 3.6 Health Care and Personal Articles: better conditions There are 110 PET CT rooms in the world and 17 in Asia. Most of the 17 are in China. Investment in hospitals increases.

37. 3. Household Consumption in China Mainland 3.6 Health Care and Personal Articles “Medical treatment is difficult and expensive”: Health care system is in reforming • Structural imbalance of medical resources, • Shortage of government financial investment, • Slow development of medical insurance, • Drugs circulation disorder, • Benefit seeking of the public hospitals • Lack of supervision of medical market • Gao Qiang, the Minister of Health,2006 Transfusion  Room for Outpatients: China to crack down on antibiotics abuse

38. Outline • 1. Introduction • 2. Social Stratification in China mainland • 3. Household Consumption in China mainland • 4.Discussion

39. 4. Discussion • In 2008, Chinese government has made a plan to increase dominant demand and stimulate consumption because of the global economic depression. Shall they increase the income of wealthy class or poor class? The propensity to consume is 0.66 of the wealthiest 10 percent of the population, while it is 0.99 of the poorest 10 percent. (Ministry of commerce of PRC)