Cover, Issue 514
April 11, 2011
Translated by Tang Xiangyang
Original article: [Chinese]
An executive at Prada once said that the last thing he wanted to see was a customer dressed head to toe in Prada. China's new rich are presently just that, tasteless upstarts dressed entirely in Prada.
On March 26, in Toulouse, a Qing Dynasty imperial jade seal and a rare painting of the Qianlong Emperor were purchased by Chinese buyers at auction. The former sold for 12.4 million euros, a new record for jade seals, while the painting went for 22.05 million euros, a record for an Asian artwork auctioned in France.
Cases like this are hardly surprising. Last October, a Chinese entrepreneur bought a bowl crafted during emperor Qianlong's reign at an auction for 550 million yuan, but up the present day, the buyer has still not paid the agreed price, perhaps he regrets his irrational behavior.
Sadly, this is only the beginning. As China is now the world's second largest economy, the country's new rich are buying everything they can get their hands on - mines, factories, ports, land, luxury items, artwork etc. Will the Chinese buy up the whole world?
Luxury goods are especially attractive to many Chinese buyers. A report from Goldman Sachs indicates that in 2010, the volume of luxury goods bought by Chinese exceeded those bought by Americans for the first time in history. China has become the world second largest luxury goods consumer. It is expected to pass Japan some time over the next three years.
The average age of Chinese consumers who buy luxury goods is 15 years younger than that of Europe and 25 years younger than that of America. Professionals say that the habit of purchasing luxury goods does not depend solely on income or age, but rather the mentality of consumers plays a vital role.
After years of suppressed consumption, China's appetite for buying things has surged over the past decade or so. From the very beginning, in addition to meeting our day-to-day needs, we have had a natural desire to buy luxury items - goods that signify wealth and arouse the envy and admiration of others.
This irrational type of consumption can best be seen through competitions held among some of the new rich, in which, in order to gauge the wealth of each individual, they count many bottles of XO they're willing to smash (an updated version of the traditional tale of the competition between Wang Kai and Shi Chong) - http://www.redcandle.com.cn/ydyuandi/ShowArticle.asp?ArticleID=15
These days with more and more wealthy individuals emerging, signs of this irrational consumption are overwhelming. Everyone pursues this kind of lifestyle, leading to an unreasonable spike in the sale of luxury goods. In developed countries, people only use 4 percent of their income on luxuries, while in China the rate is over 40 percent.
Many of the people who want to purchase these products, simply can't afford them.
According to a report released by the World Luxury Association, over 70 percent of Chinese youth buy luxury goods for show. The brand culture is not important; the main thing is that other people in their social circle see that they have it.
This type of consumer mentality is understandable. Chinese people have gone from being poor to being rich overnight. They are flashing their cash by blindly purchasing luxury items. There are hints of the emergence of consumerism that took place in America in the 20th century, when hard work and thrift stopped being considered virtues, physical labor and saving were no longer aims in themselves but rather became a means through which consumption could be achieved and the ultimate goal was pleasure.
If China follows suit, it will be an unprecedented disaster. Just as Jonathan Watts, the Asia environment correspondent for The Guardian, wondered in the title of his book When A Billion Chinese Jump, will the earth change its orbit? The answer is a resounding yes.
If China, with a population of over a billion, adopts the habits of excessive consumption, the earth will collapse. We are not against consumerism, but we cannot support the habits of excessive consumption. China's consumption should and must be reasonable and sustainable.
For China's rich, vanity consumption is not the only way to display their wealth. The philanthropist Andrew Carnegie once said, "...the man who dies thus rich dies disgraced." Excessive luxury-spending is a disgrace. China's wealthy are not giving enough to charity. According to statistics from the China Charity Federation, wealthy mainland Chinese, despite possessing 80 percent of the country's wealth, contribute less than 15 percent of the total amount donated to charity.
We know charitable giving in China is hindered by many systemic obstacles, but one thing, at least, must be made clear: true wealth is gauged not by the number of villas or Prada bags you own, but by your sense of social responsibility.
This editorial was edited by Ruoji Tang and Paul Pennay
