China’s middle class: We’re being picked like leeks by the government

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Beijing, CNN (CNN)Spike Wang, a 29-year-old financial professional based in Shanghai, is struggling to live the Chinese dream.

The past year has been especially tough.
Like many middle-class investors, Wang dumped most of his shares in Chinese stocks after his portfolio suffered a 40% loss in just two years.
    Unable to afford a 37% rent increase, he left his old apartment in Beijing this year and moved to a cheaper apartment in Shanghai. But he still found the cost of living in China hard to handle.
    “I can clearly feel that groceries are more expensive, especially in the second half of the year,” he said.
    The problem of economic distress among Chinese citizens is so common that there is a buzzword on China’s cybersphere for people like Wang — “jiucai” or leeks.
    “I’m a typical leek that is picked in the stock market, rental market and as a consumer,” said Wang.
    Middle-class Chinese consumers call themselves “leeks,” the popular green vegetable used in a Chinese cuisine, to express their fears about the economy or financial issues online.
    It’s a self-deprecating term implying they are being played for suckers, just faceless vegetables harvested by big companies and the government, especially amid the escalating US-China trade war and slowing economy.
    Tongue-in-cheek reactions such as “the government is going to harvest the leeks again” or “we’re being picked like leeks” are common among members of the middle class.
    Chris Xing

    The forgotten people

    China’s middle class has rapidly expanded over recent decades amid an enormous economic boom which showered the country’s citizens with unprecedented wealth.
    Amid this rapid rise in living standards, President Xi Jinping laid out his vision for the “Chinese dream,” a propaganda term promising prosperity and an easy, affluent life.
    But a slowing and uneven economy, threatened by US pressure, has caused growing worries for many across the country.
    In one year, rents in Beijing have risen at least 40% in some areas, with residents telling state media they paid more than half their salary in rent.
    One of the best measures of cost of living in China, the Consumer Price Index (CPI) has risen every month since May.
    The recent China-US trade war has only stoked more uncertainty for the country’s vulnerable middle class. In September, JPMorgan economists estimated that the trade war could cost China at least 700,000 jobs.
    financial issues online

      What’s at stake in a trade war with China?

    The Chinese stock market, into which millions of middle-class investors put their hard-earned savings, has plunged off the back of the US measures, falling more than 25% since January.
    Originally, “leeks” was a term coined in China’s stock market to refer to its vast base of retail stock investors, as many as 100 million.
    The multitude of eager, dispensable investors grow and sprawl like leeks when the environment is favorable to growth. But when the stock market falls, the major players will survive while the average investors lose it all.
    When the “harvested leeks” are forced out of the market, fresh inexperienced leek investors will sprout up to repopulate the market in a very short time.
    The middle class feels it is being “picked” by the government as well as the stock market, according to Zhang Lin, an independent economics commentator.
    JPMorgan
    “The real ‘leeks’ are the same of group of the middle class whose interests are sacrificed amid the trade war,” Zhang said. Among them are white collar workers in private sectors and owners of small to medium-sized businesses.
    Two new laws in particular, adopted to reinforce state economic control after the outbreak of the trade war, have been seen as “leek harvesting” by online commentators, stirring fury and fear from the group.
    A new e-commerce law has taxed the country’s lucrative online businesses such as taobao.com, from which some middle-class people have made a fortune, while a change in the collection of the mandatory social welfare fund has added to the financial burden on small businesses.
    Chris Xing, who works for an internet start-up in Beijing, said the new policy has caused labor costs to rise and his company is struggling.
    He said the interests of the middle class are being sacrificed to save the Chinese government from the brewing trade war, and Zhang agrees.
    “(The government thinks) more needs to be squeezed from the private sector so that the state has the firepower to accelerate spending on infrastructure and investments … to counterbalance the impact of the trade war,” Zhang said.

    ‘Meat on the cutting board’

    Although the origin of the term leeks was related to finance, Chinese internet users have expanded it into the political realm to vent their frustration about political and social control.
    When state media editorials in August pushing for penalties against families with less than two children were widely mocked, social media users joked that the “country is desperate for more leeks to be harvested.”
    “China’s middle class … lack power to change the law or to lobby with interest groups,” said Zhang, “Without rights, assets are unprotected, and middle class has to face more uncertainties.”
    As people worry about the imminent economic winter, with little clear end in sight to the US trade war, many are trying to save money, giving rise to a phenomenon called “consumption downgrades.”
    An article titled, “This generation of young Chinese, be ready for the bitter days ahead,” has circulated widely on the Chinese internet in recent months.
    Ma Ning
    The author, Ma Ning, says that “things have changed” since the years of “consumption upgrade,” back during the boom times of the country’s economy.
    “Yearly gym memberships are swapped for cheaper, monthly ones. Apps for second-hand goods trading reached a new high. Chinese pickle stock has risen 200% in the past year … Even the avocados … are not that popular anymore,” she said in the piece.
    Chinese state media claims there is no such thing as the “consumer downgrade,” saying consumers were just “calmer and more sophisticated.”
    President
    Both ordinary middle-class consumers in China’s cooling economy, Wang and Xing, told CNN they are quietly changing their lifestyles.
    Wang said he would think twice before eating out and opt instead for buying groceries in bulk and cooking on his own at home.
    Xing, the Beijing start-up employee, said although he is able to swallow the rising costs for now, he would probably defer some big purchases.
      Among the expenditures to be avoided is another child for and his wife. It’s just too expensive, he says.
      “Rather than leeks, I feel like I’m more of ‘the meat on the cutting board,'” Xing said. “We hold no sway over tax, the policy-making, the reality.”

      Original Article : HERE ; This post was curated & posted using : RealSpecific

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