The Changing Fortunes of India and China's Middle Class

A Tale of Two Economies

India and China, the world's most populous nations, have taken different paths in the last four decades.

• 1980: Neither had a significant number of people in the global middle class.
• Today: China has a large portion of its population in this group, but India has not seen the same growth.

The Puzzle of Economic Growth

Both countries opened their economies around the same time.

• China: Became known for manufacturing.
• India: Became known for services.

Yet, the results for their people are not the same.

The World Inequality Report

The World Inequality Report highlights this difference.

• Question: Why are their middle classes so different?

Possible Reasons

1. Growth Models

   • China: Fast growth focused on manufacturing.
   • India: Slower growth focused on services.

2. Inequality

   • China: May have spread wealth more evenly.
   • India: May have more inequality, leaving many people poor.

The Importance of Fair Growth

• Economic growth alone is not enough.
• It must be fair and inclusive.