<B>SOUTH AFRICA.</B> They hang out in glitzy bars, drive luxury cars, compete for the best homes and shop in upmarket stores ? South Africa?s black middle class has arrived and is fuelling a consumer boom. Companies, especially retailers, have reported record profits over the last couple of years thanks, mainly, to the rapid rise of the black middle class following decades of exclusion from the mainstream economy under white minority rule. Several companies are readying themselves to cash in on the emerging black middle class, and their strategy includes opening stores in black townships ? which they shunned for decades.

?This is a hugely powerful consumer group and it?s growing rapidly,? Professor John Simpson of the University of Cape Town?s Unilever Institute told Reuters. Other factors responsible for the record profits include higher disposable incomes due to tax cuts, mild inflation and the lowest inte-rest rates in more than two decades. Imperial Holdings, South Africa?s biggest vehicle retailer says during the six months to December last year it sold 25 percent of its 63,000 new cars to black buyers. A study by the Unilever Institute found that black consumers were more brand conscious than their white counterparts and favoured symbols of style and wealth, such as luxury German BMW sedans, over say medical insurance.

<B>CHINA. </B> Xiaodian, close to the provincial capital, Taiyuan, is visibly better off than many villages in China, where 750 million of the 1.3 billion-strong population live on the land. But in many ways it is typical. People have no pensions or medical insurance; there are rutted unpaved roads, but no clinic. Rural incomes rose 6.2 percent last year and 6.8 percent in 2004. But they are still one third of urban wages. How to close that gap is the main aim of the Communist Party?s new five-year plan, which sets out to build a ?New Socialist Countryside?. The 2,600-year-old agriculture tax is being scrapped and fees for compulsory education eliminated. The central government will increase spending on rural areas this year by 14.2 percent to $42 billion and make a further $13 billion in transfer payments.

The increase sounds generous, but it is only a bit more than the projected 13.8 percent rise in total government spending. What?s more, the sums of $585 million earmarked this year to expand a pilot scheme for rural health insurance and $500 million to improve rural hospitals are dwarfed by the $6 billion that the ?China Daily? says was spent on buying official vehicles in 2004.

Haruhiko Kuroda, head of the Asian Development Bank, says that for an extra 100 billion yuan ($12.5 billion) annually for two to three years China could provide a minimum income for 25 million of the poorest peasants, provide free schooling for 120 million pupils and extend basic rural health care for all 770 million farmers.

?Ambitious, yes ? but achievable,? Kuroda told a forum in Beijing last week.