Abstract: The downwardmoving of status identification is a very important phenomenon in theory building and policy making. To explain the quantitative downwardmoving of status identification, we must understand the qualitative changes in the basis of status identification. The statistical analyses show that the effects of the social units that used to be connected with status identification (e.g., types of Danwei, types of Hukou, sense of work honor) have declined significantly, but the effects of the variables that are connected with market elements (e.g., income, income satisfaction, types of occupation) have increased dramatically. The basis of status identification has shifted from perception of affiliation with social units to perception of possession of market opportunities (e.g., earnings), an essential shift in the “reference system”. The key to the understanding of the downwardmoving of status identification lies in the change of the “reference system” of the social status, not just the change of an individual’s “reference point”. Owing to the shift in the reference system for status identification, the old socialunitaffiliationbased “middleclass identification” tends to be falling apart, but the new marketelementsbased status reference system (possessions such as earnings) is hard to be established for “middleclass identification” due to its vague boundaries, instability, and overall perceived inequality. So on the one hand, the downwardmoving of status identification has become a universal phenomenon, not just observed in a particular group or stratus; on the other hand, the improvement of economic conditions and the decline of status identification go hand in hand. For the sake of policy making, this study suggests that, in order to have “middleclass identifications”, we should not only improve the incomes and benefits of the individuals but also establish social affiliation and citizen identity through regulations and institutions.

Key words: status identification, downward-moving of status identification, social affiliation, market opportunities, shifting of the reference system