The Chinese Middle Class: Myth and Reality

American Students are Interested in Learning about China

While most Lotus Chinese Learning students are children, I still teach adult students who are interested in learning Mandarin Chinese. Many of these adult students have plans to travel in China for business or China is a big part of their company’s future.

Anyone who reads the news knows that China is a growing consumer market with a large middle class. In my previous life, I was a marketing manager for a consulting company that assisted foreign companies in China. We had a steady stream of clients who were interested in selling everything from Belgian waffles to North American yoga pants in China.

photo of interior of shopping mall
Lots of companies have big plans to sell their wares to the emerging Chinese middle class

Is China’s Middle Class What you Think it Is?

Almost invariably, I could tell that the products would be less successful than their makers dreamed that they would be. Often, a cheaper, local option was already available. Or the product had very little appeal to the local market. If you wouldn’t try selling marinated chicken feet in America, pitching artisan Greek cookies in China is just as foolish. I know the size of the Chinese middle class inspired big ambitions in these clients, but the truth about the Chinese middle class is not what you think.

Most of my adult students think either one of two things: Chinese people are still running around in Mao jackets living the lives of subsistence farmers or Chinese people drive their Lamborghinis to the Louis Vuitton store to buy a new handbag for every day of the week. Many businesses with interests in China are hoping that the second scenario is the one that is closer to the truth. Well… China’s population is still 43% rural.

There are people cruising around Shanghai in their Lambos, but those folks are the elite of the elite. If you are interested in learning about China’s ultra rich, check out the Hurun report.

The Gap Between Rural and Urban

Anyway, back to the rest of the country. Not only is China’s population still 43% rural, but there is a big difference between the lives of rural and urban people. In America, people in rural areas average about 4% poorer than urban people. In China, rural people are on average 63% poorer than urban people. There is a huge gap between the lifestyle of professionals in Beijing and famers in Anhui.

What counts as “middle class” in China, is also a bit different that what we think of the middle class in America. The raw numbers are promising: by certain measures, China has a middle class population of about 330 million. The entire population of the US is about 327 million!

photo of RMB 100 notes
How many Chairman Mao’s does a middle class Chinese person have at their disposal?

Seems like a lot of middle class people, right? Not so fast, that figure includes people with household incomes of $8,000 a year. They are not subsistence farmers, but they don’t buy a lot of iPhones either.

Still Interested in Doing Business in China?

If, after reading these sobering facts the Chinese middle class, you are still convinced that China is in your business’s future, get in touch. You can also read about class options for adult learners here.

**Big thanks to Mario Gonzalez Fuentes, phD (aka Mr. Lotus Chinese Learning) for the statistics in this post**

China and Your Career

The Rise of China

Last month I did a presentation at Texas State University about China and young professionals’ careers. Gone are the days when the only people whose careers intersected with China were diplomats and manufacturers. My classes for adult students are filled with people who work in tech, medical devices, oil & gas, sourcing, and other industries. They either go to greater China for work or they work closely with Chinese colleagues here in San Antonio. Many students are interested in how greater China might be a part of their career and others realize that the region will be a part of their future based on their career interests. It is just as common to travel to China for work now as Japan was in the 80s.

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Since I was talking to undergraduate students, I decided to keep things interesting by talking about real people I know whose careers have had some connection with China. Below are the slides from my presentation a long with some comments. I called these “mini case studies” but they really are just the personal stories of early career professionals who work a little or a lot with China. I’ve changed details in every story except my own to keep people anonymous.

Case studies of Young Professionals and China

my career and China

My adult students always ask me where I learned Chinese. The short answer is China. The slightly longer answer is that I learned through language classes at Chinese universities and immersion in Chinese society. Eventually, I translated my language abilities (heh :)) into a job in marketing at a consulting firm in Shanghai. When it was time for me to come back to the United States, I thought that I would probably stay in the marketing field and that no one would care about my experience in China. I’ve never been more pleased to be wrong. Turns out that my knowledge and skills in Chinese were way more interesting than my experience in marketing. More on how that turned into Lotus Chinese Learning is here.

Borja’s Career

borja

Borja’s career has a lot to do with China because he lives there. He works for one of the world’s largest wine companies and he focuses on expanding their market share in mainland China. China is important to his company because there are almost 50 million wine drinkers in China. For comparison, the entire population of Spain (where Borja is from) is 46 million.

Mr. M’s Career

Mr M

Mr. Miller is based in the Washington D.C. and while he does not go to China anymore he still is involved in the region every day. When I interviewed him for this project  he made an interesting comment about how important it is to have a deep background knowledge of Chinese culture in order to do business there. He said that of course people can get away with just hopping off of a plane and heading into a business meeting. They still might be successful. Spending the time to really learn about the background of Chinese culture will pay off for people looking to be successful doing business in China.

Kirsty’s Career

Kirsty

Like many folks in sourcing, Kirsty travels to China at least twice a year. Sourcing in China is so much more than just the Canton Fair. As factories move farther and farther inland to reduce costs, sourcing managers will have to travel away from the beaten path. A little knowledge of Chinese language and culture goes a long way when you are not in Shanghai or Guangzhou anymore, Toto.

In summary, there are lots of jobs and careers that will take people to China. There are also lots of jobs in which people will find themselves working closely with colleagues who are based in China. I’m sure that there are plenty of professionals who work in China regularly who never dreamed that China would be such a big part of their careers.

Are you an adult who has to travel to greater China? Check out our class options here.

More on traveling in China for business is here.

Mandarin Chinese for Business

photo of business card
Bring your business cards to China!

Is Mandarin Ability Necessary to do Business in China?

Last week’s post was about Mandarin Chinese for travel, this week’s topic is Mandarin for business. Just as knowing some of the language can enrich a trip to China or Taiwan, it can also help business interactions. There is nothing wrong with relying on a trusted translator to get around a business transaction in China. Knowing some of the language, however, can help deepen relationships between non-Chinese who wish to do business in China and their local counterparts. A little bit of language ability often goes a long way in China. Just be sure to get too far out of your depth!

Key Words to Know

你好 ni3hao3 (hello) is a phrase that will take you very far in China, especially if you pronounce it correctly. There are actually very few visitors to China that can pronounce 你好 with the correct tones. Locals really do notice when a foreign visitor gets them right. Often students of Chinese learn the phrase 认识呢很高兴 (nice to meet you), but in practice, most native speakers just say 你好 when they meet a new person.

名片 ming2pian4 (business card). In some ways China is much more high-tech than the US. People pay for the lunch, rent a bike, and pay their bills with their phones. They scan QR codes to do almost anything. For business however, the paper business card is still king. It is certainly helpful to know what someone is talking about when they ask for your “名片.”

Numbers. Anyone who travels to China or Taiwan for work will want to take some time off to go shopping. Knowing how to say the numbers in Mandarin Chinese will make this experience infinitely more pleasant and enjoyable. As a bonus, knowing the numbers will come in handy if you decide to take up a more serious study of the language.

If you are interested in learning Mandarin Chinese to prepare for a business trip to China, please use the contact page to get in touch.