China’s Civil Organization Estimates: Over 600 Million People Have a Monthly Income Below 3,500 Yuan

Job Fairs Are Packed, But Few Are Finding Employment(Video Screenshot)

People News Report — A Chinese civil association analyzed the 2023 personal income tax report from the Chinese Communist Party (CCP) and estimated that more than 600 million people in China earn less than 3,500 yuan (about 500 USD) per month. In contrast, only 700,000 individuals are classified as high-income earners with annual salaries exceeding one million yuan. Scholars suggest that China is facing a "collective return to poverty" amid rapid economic decline, and the pyramid-like social structure signifies substantial instability.

Only 700,000 People in China Earn Over 1 Million Yuan Annually

According to Radio Free Asia, the "China Social Security Society," approved by the CCP’s State Council and registered with the Ministry of Civil Affairs, released a report on its WeChat account on October 20. This report, which analyzed income data from the 2023 individual tax collection report, estimated that more than 600 million people in China have a monthly income below 3,500 yuan, while only 700,000 people earn an annual salary exceeding one million yuan.

A few years ago, the CCP raised the threshold for personal income tax from 3,500 yuan to 5,000 yuan. Based on 2022 data, the number of income tax filers decreased from 157 million to 65.12 million. The tax data shows that over 70% of the population in China does not need to pay income tax. Among the less than 30% of people who do pay taxes, more than 60% fall into the lowest tax bracket of 3%, contributing only a small amount of tax.

The report also highlighted that around 100 million people in China earn between 3,500 yuan and 5,000 yuan per month, while 110 million people have a monthly income between 5,000 and 10,000 yuan. However, only 20 million people in China earn over 10,000 yuan monthly or more than 100,000 yuan annually. With China’s total workforce at 720 million, this means that over 600 million Chinese earn less than 3,500 yuan per month.

Further breakdowns of the middle-income group (those earning over 100,000 yuan annually) reveal that 12 million people earn between 100,000 and 150,000 yuan annually, while only 8 million people earn more than 150,000 yuan.

The high-income group, consisting of individuals earning over one million yuan annually, accounts for only about 700,000 people in China, approximately 1% of those who pay personal income tax.

Commentary: Actual Number of Low-Income Individuals May Be Higher—"Collective Return to Poverty"

Renowned Chinese financial scholar He Jiangbing, in an interview with Radio Free Asia, argued that the report is based on official data, which makes the figures relatively conservative. He believes that the actual number of low-income people in China is likely higher. He also noted that China’s pyramid-shaped social structure indicates significant instability.

He Jiangbing said, "These numbers might not be completely accurate, but the trend is clear. We have a social structure where there are very few high-income earners and a vast number of low-income individuals. This structure is unhealthy and unstable."

He further pointed out that Chinese society is experiencing a "collective return to poverty" as the economy declines, and the middle-income group is suffering the most compared to those who were already low-income.

He added, "Right now, it’s a collective return to poverty, and there’s no hope in sight. When the economy declines, everyone is affected. Even the high-income earners are losing money. The path to poverty for those who were once wealthy is different from that of the poor, but both rich and poor suffer during an economic downturn."

Commentary: China’s Rapid Economic Decline Hits the Middle-Income Group the Hardest

Li Dun, a sociology scholar from Tsinghua University, told Radio Free Asia that low-income people make up a large base in China. He also suggested that the official statistics on high-income groups might not include individuals who have gained wealth through illegal or "grey" channels, including those from interest groups or the newly rich.

Li Dun said, "The low-income group includes those living in rural areas, rural-to-urban migrant workers, and low-income urban dwellers—some of whom are occasionally aided by state relief. This makes up a large base. The wealthier people at the top often increase their wealth through various illegal means."

He also explained that, in a stable, olive-shaped society, the middle class should make up the majority. Even during China’s period of rapid economic growth, it never truly formed a middle class, only a group of middle-income earners. Now, as the economy declines rapidly, this group is the hardest hit.

Li said, "China actually doesn’t have a middle class, because a middle class isn’t just defined by income but also by values. China only has middle-income earners, not a true middle class. Right now, this group is the most hurt because the poor are still poor, but the real changes in recent years have hit the middle-income earners the hardest."

Commentary: China’s Low Employment Rate Is an "Unsolvable" Problem

Li also pointed out that employment is directly linked to income, and the current low employment rate in China is a severe issue that is almost unsolvable under the current system.

He said, "The biggest problem now is unemployment, not all these other policies about boosting domestic demand or adjusting this or that. Employment is a huge problem. There is a serious potential crisis, and under the current system, this problem is nearly impossible to solve."

Both He and Li agree that the CCP’s political repression and economic downturn have accelerated the migration of some high-income earners overseas.

In late May 2020, the late former Premier Li Keqiang caused a stir when he stated at a press conference during the 13th National People’s Congress that "China is a developing country with a large population, and 600 million people earn only 1,000 yuan a month." This rare candid statement from Li was widely discussed domestically and abroad.

In December 2023, the "China Social Security Society" published an article on its website titled "Around 964 Million People in China Earn Less than 2,000 Yuan per Month", citing data from the National Development and Reform Commission's "Employment Distribution and Consumption Division" and Beijing Normal University's "China Institute for Income Distribution." The report indicated that 600 million people earn 1,090 yuan per month, representing 42.85% of the population, while those earning less than 2,000 yuan per month number as high as 964 million.