Economy

Markets

Industries

Insights

Reports

Events

Unhealthy luxury

(China Daily)
Updated: 2009-09-22 08:24

China's overtaking the United States as the second largest luxury consuming country next only to Japan seems to match its position as the world's third largest economy. But considering that its per capita gross domestic product is around 100th place, this points to the alarming disparity between the haves and have-nots.

Statistics show that BMW car sales worldwide dropped by 19 percent compared to last year, but its sales in China increased by 26 percent during the same period. The same is true of other limousines and other luxury.

There is nothing wrong with the wealthy people purchasing whatever they desire. Yet, the fact that luxury consumers make up 13 percent of the country's 1.3 billion people, according to statistics in 2007, reinforces the perception that 80 percent of the country's wealth is owned by 20 percent of its population.

Some people should be allowed to get rich first, which was described by the country's reform architect Deng Xiaoping as a natural result of the market-oriented economy introduced after the economic reform in 1978.

However, it is the responsibility of the government to ensure reasonable redistribution of social wealth so that disparity levels are contained within acceptable limits. In this way, the living standards of the majority of residents would improve continuously with the country's economic development and social progress.

It is obvious that common prosperity, the ultimate goal of economic reform and opening up, will hardly be realized if the gap between the rich and poor continues to widen.

What makes the widening gap even more threatening is the fact that some corrupt government officials accumulate personal wealth through abuse of power. And their joining the ranks of luxury consumers by squandering illegal gains causes social injustice and public discontent. Another phenomenon that deserves attention is the link between luxury consumption and corruption. Some business people bribe government officials with luxury goods. A corrupt official surnamed Dai in the city of Wenzhou, East China's Zhejiang province, has been nicknamed as "Bag Dai" because of owning many LV brand bags. It was impossible for him to buy that many luxurious bags with his own money. They are quite probably booty.

In striking contrast with the rapid rise in luxury consumption, out of 10 million enterprises, only 100,000 - i.e. 1 percent - have ever participated in charity activities. At the same time, there are millions without enough to eat and wear. True, they do not have the obligation to help the have-nots, but they cannot shirk their social responsibility of paying back to society part of what they earned from it in one way or another.

For a developing country with unbalanced development, rising up as the world's second largest luxury consumer is nothing to be proud of. Instead, the rot it reveals demands the government's immediate attention.

(China Daily 09/22/2009 page5)