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A Once Frugal Nation, China Is Getting Run Over By Consumerism

A shopping street in Wenzhou, China
A shopping street in Wenzhou, China
Bai Zao


BEIJING — The "invisible poor" has become a new online — and ironic — moniker in China. It describes young people who earn more than 10,000 RMB ($1,570) a month, a considerable income for most Chinese, but who are also big spenders. They wear $500 suits, get regular facials, drink top-class Chilean wine, and insist on living in a rental apartment that costs more than half their monthly salary. In brief, this so-called "poor" population owes their poverty to their extravagant lifestyle rather than to low income.

In a country historically known for the frugality of its people, this new generational trend is worrying certain Chinese economists. They are concerned that a society of savers is yielding to the habit of "living paycheck to paycheck," with the risk that it could turn China as a whole into a high-debt nation obsessed with personal consumption.

Precisely as the cultural critics of post-modern times have been criticizing, they are convinced that excessive advance consumption will allow the world to be coerced by desire, and in turn dispel our culture and its depth.


McDonald's near Drum Tower in Xi'an — Photo: BrokenSphere

China is now experiencing what the French philosopher Jean Baudrillard described in his 1970 book "The Consumer Society": modern citizens surrounded with an ever-increasing abundance of objects, services and material wealth which necessarily leads to stunning consumption. This constitutes a fundamental change in the human experience.

The pursuit of self-gratification is central to the post-industrial society, as society advances and living standards improve, vast numbers of people demands now reach beyond their basic needs. High-end furniture as well as electronics, imported infant milk, luxurious cosmetics and apparel make up Chinese people's material demands, but are also a symbol of their identity and status. In brief, commodity worship is deep down in people" consciousness and is now becoming the driving ideology of a Chinese consumer society.

Recently a story made the rounds on China's internet: a senior R&D engineer was rejected after a blind-date with a girl on the grounds that he went to the date wearing a pair of China-made shoes. Not part of the so-called "invisible poor," this practical, down-to-earth man was ruthlessly ridiculed by young people on social media.

The pursuit of status, taste, identity and self-perception feeds consumer society, and vice-versa. Thus the shame in wearing a domestic brand and demands that a sandwich comes with avocado in it. A holiday is not worthy of the name unless it is taken abroad. And so on. One relies on these "codes' to find people with a similar outlook.

The debt-ridden approach is linked to the American lifestyle, where people pay anything from their medical bills to their pots and pans with a credit card, But there's one basic reason why Americans dare to spend money they don't have: because the credit system is well developed with checks and balances.

Humans are not just economic animals.

The momentum of China's ongoing financial innovation such as wallet-less mobile payments, and the various small consumer loans that are extended for daily consumption, such as renting, tourism, decoration, and education, is quietly encouraging youngsters to spend money. In essence, the background of this "invisible poor" is exactly the same as that in the United States.

Americans also have a sound retirement and insurance system to help guarantee their future. Developed over the past 200 years, today the system includes public social security, employer benefits and private retirement plans.

From an economic perspective, the phenomenon of a growing population of "invisible poor" in China is not particularly worth worrying about as long as the supporting financial, retirement and insurance systems go with it.

Chinese youth are busy enjoying the convenience brought about by this wave of internet financial innovations. The important thing is to come up with a pension and insurance system that can prevent them from poor (for real) when they hit middle age.

Of course, humans are not just pure economic animals. Though everyone is free to dispose of their assets as they see fit, it is hard to tell how much consumption is caused by conformity spending, impulsiveness, or the urge to measure up with others. Regardless, this all returns us to the initial question: how can someone find feelings of satisfaction while spending money they don't have?

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