Income and Consumption of Chinese Residents

The life of Chinese people has undergone fundamental changes over the past 50 years. The changes are so significant that people feel the country has changed completely in the 20 years since the late 1970s.

People's income and private assets are on the rise. Houses, car, computers, stocks and overseas travelling have become the major areas of investment and consumption.

Since 1979, China economy has continued to grow rapidly. It is also been a period of explosive growth in people's income.

Statistics show that the net income per capita of Chinese farmers has increased from RMB134 in 1978 to RMB2476 in 2002, an average actual growth by 7.2%. The disposable income per capita of urban residents has grown from RMB343 to RMB 7703, an average actual increase by 6.7%.

In 2003, the living conditions of the average Chinese person continued to improve. The national disposable income per capita of urban residents is RMB8472 with an actual growth of 9% after deduction of inflation. The net income for farmers is RMB2622 with an actual growth of 4.3%.

The Engel index for household (i.e., the ratio between the household's food consumption expenditure and the total household consumption) is 37.1% in cities, down by 0.6% over last year. It is 45.6% in the countryside, down also by 0.6%. At the end of 2003, the number of private cars was 4.9 million, up by 1.46 million on the previous year.

The Chinese market has now completely eliminated the shortage of daily necessities and food for most people. Great changes have taken place in the consumption pattern of households. Among all household consumption, expenditure on food, clothes, and basic daily necessities, which reflects the basic subsistence needs, has decreased proportionally.

On the contrary, expenditure on housing, transportation, health care, education and entertainment, leisure and travelling is up, indicating a further improvement in living standards.