World leaders often call on Chinese consumers to buy more to rescue the global economy. Can they?
Perhaps. Consumer spending has nearly quadrupled since 2000. Just ask GM, Tesco, Apple, and all the other multinationals banking on Chinese consumer spending. Starbucks alone has just announced plans to triple its number of stores in China to 1,500 by 2015. Five years ago, when I began to research my latest book, I started a list of Number One’s for the Chinese consumer: largest consumer of mobile phones, beer, beef, etc. And China is also quickly becoming the largest luxury goods market. Someday soon you will have to go to Shanghai to see the hottest LV handbag or fanciest Tag Heuer watch.
This sounds like good news?
Not entirely. Even if Chinese consumers manage to spend enough to rescue the world economy, consider the domestic and global implications of the Chinese driving more cars, eating more meat, or taking more package tours to the UK. Nobody should begrudge the Chinese their Happy Meals or any of the other pleasures non-Chinese consumers enjoy. But everyone everywhere needs to contemplate the collective impact of these seemingly minor changes in Chinese lifestyles. China doesn’t need to be the Number One consumer in anything to have dramatic impacts.
Can you give an example?
The implications of Chinese consumerism are wide-ranging, interconnected, and often both good and bad. Take cars. Fifteen years ago few Chinese owned cars. But in 2009, China surpassed the US as the world’s largest car market and grew another 40% in 2010. This is good news for multinationals such as GM, which now sells more cars in China than in the US. Anyone invested in stock markets may already be benefiting from Chinese consumerism. But there are many more implications. Even with the continual addition of new and wider roads, cities like Beijing cannot confiscate land, demolish residential buildings, and build roads fast enough to accommodate all these new cars. These roads are gobbling up China’s valuable agricultural land. And cars aren’t fueled by goodwill. China lost its energy independence in the 1990s and now, as with the many Western countries, China’s need for imported oil forces its government into unsavory international relationships.
Is anyone countering the problems created by Chinese consumerism?
The Chinese state certainly is. But can legislation successfully offset the negative impacts fast enough? And if the downsides of increased consumption aren’t mitigated quickly enough in China, can we expect India, Brazil, and other developing consumer markets to be any different? China is a harbinger for much of the world.
Should we be worried?
Yes, but we should worry about the right thing. After all, there is no shortage of anxieties concerning China these days, including competition for energy resources, growing Chinese military budgets, an undervalued Chinese currency, and carbon emissions. But I think we need to focus on the more subtle, underlying challenge that connects all of these and many other China challenges: the effects of China’s ongoing development of a consumer culture-in other words, their replication of our lifestyles.
