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Posts: 1098

Shifu

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Q: Where does all the money come from to buy all this stuff?

I spent the better part of yesterday in a large shopping mall with my better half. It is not a luxury mall and has stores of all different levels. Every time I go to malls in China I am amazed by the number of stores selling stuff that is disproportionately expensive to the incomes of locals and generally way more expensive than comparable products in western countries. A very thin gold bracelet with little design - 7,000 rmb. It was hard to find a pair of woman's shoes for under 1,000 rmb and apparently the store we were in was not considered to be particularly fashionable or expensive. A t-shirt with a Nike logo on it - 300 rmb. 2 scoops of Haagen Dazs ice cream (with no toppings!) - 59 rmb. Now, for foreign brands I get that there's a tax and all but a lot of the items including the shoes were local brands. I am constantly told that 4,000-5,000 rmb per month is considered to be a pretty good income in my city. So where does the money come from to buy all of these products? Is it that most people really can't afford them but there are just so many people around that enough can to keep all these stores and malls in business? Are the Chinese really that amazing at saving? I mean I know they are but how can you really save much of a 4,000 rmb per month salary? It's impossible to rent anything for under 1,000 here and anything decent will be 1,500 plus. Owning a house or car presents regular expenses too. So who exactly is buying all these 1,500 rmb pairs of shoes, 20,000 rmb jade pendants, and 1,000 rmb men's shirts? Are people really saving every penny to drop a month's income on a couple of dress shirts? Is it just the top 10% of earners buying this stuff? Do locals actually earn a lot more than the official numbers suggest?  

9 years 14 weeks ago in  Shopping - China

 
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Posts: 3837

Emperor

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many of the girls i teach tell me that they will sometimes skip meals to save money to buy brand products. They also use this as an excuse to loose weight - which they don't need to do anyway, but they are so insecure about their appearance.

Then there is the family purse to be called on, if they want something: mother will usually give in to demands

The third option is the boy-friend and his mostly willing behaviour of tolerating a demanding gf, because as we all know, the only way a girl will know you care is if you buy her expensive crap. indecision

 

laowaigentleman:

It's so passe here.

 

I almost expect Christoper Lloyd and Michael J Fox to fly by in a tran-sam playing Hughey Lewis and the News.

 

Conspicuous consumption is so 1982.

9 years 14 weeks ago
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nzteacher80:

It was a DeLorean, not a Trans-Am.

9 years 14 weeks ago
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dongbeiren:

I know people often rely on the family but the question still remains where the family got the money from if the wags are as low as people say.

9 years 14 weeks ago
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laowaigentleman:

I stand corrected wink

9 years 14 weeks ago
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9 years 14 weeks ago
 
Posts: 19790

Emperor

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I don't think, Chinese are as rich as Americans .....(in McD job lines), butT.....that's me, and I might be wrong. Can I do smiley out of the content?

laowaigentleman:

Chinese are richer at getting jobs that they haven't got the mental equipment to do properly because of the prevalence of nepotism and cronyism which is given the nice name of guanxi.

9 years 14 weeks ago
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9 years 14 weeks ago
 
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Traditionally the Chinese were a saving culture, but they're also a face culture. One of the things that has baffled me the most about globalization is why there was a mad rush by foreign businesses to outsource their manufacturing capacity to China when India is just as dodgy and cheap with the added benefit of having British common law to protect investors.

 

Perhaps the reason for this is that businesses know that the Chinese will buy labels and products which wealthy people in my own country consider stupid, vain and frivolous purchases. Why do they buy them? For face. It is really bizarre, but it's normal for Chinese people to go heavily into debt to buy a car, a house and purchase some kind of ointment for rubbing on their balls or whatever called Chateau ve de Fleur (shat over the floor).

 

Do you have weibo or wechat? If you do, you'll see all kinds of pictures of the latest tat some conspicuous consuming fool with a chip on his shoulder has bought to feel validated as some kind of success after being screamed at to study by his parents his whole life.

 

It's a truly sad phenomenon, but sadder still that artistic and contemplative types can't push back creatively to ridicule this kind of vulgar behaviour through the media.

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9 years 14 weeks ago
 
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Most local Chinese that I know are heavily indebted, both upper, middle and lower class members, they owe money to banks, "lending agencies" as well as other individuals. When they learn that I have zero debts and a lot of savings they always ask me for money.

 

Unlike most Western countries there is no central database (in most cases back home it is managed by some governmental institution) in China to record people's credit history so it's easy to just go to another bank or the next city to get a new loan, except if you are a foreigner, then it's a straight "No loan for foreigners".

 

For most of their history Chinese have been known to save up to 50% of their income, to be the best savers in the world in fact, that was still true recently but not anymore. The consumer society has definitely settled in China too and the desire to show off your status to gain face (mianzi) has become very strong in the last decade so people buy expensive products to look good, and by looking good I mean the fact to walk out of the premium shop with a bag full of products, that very minute when some important/influent person might see you walking out of there is all that matters, products themselves also have significance but later when trying them and posting photos on the internet to try desperatly to make others envy you, a sort of compensation for their lack of personality and the empty shells they are.

 

Recently again a girl that I know and who earns around 10000/month was desperately looking for 5000 to pay her rent, she even offered me regular fun bed for a year in exchange for that sum one time only, I declined her offer of course and asked her why she rents such an expensive apartment (she is single) when there are decent alternatives for no more than 2000 in the same area, she said because it looks good to live in that residence. I didn't lend her anything because I know she won't pay it back .

 

Typical peasant's mindset.

laowaigentleman:

It's interesting that you mention this. I am sure that what you say is true, but what always eluded me was the extent to which they're all indebted.

 

I have a friend in my city here who is desperate to start a business. He and his three friends have started a firm which goes to Bali and takes photos of people before they get married. Apparently Chinese people can get a landing visa in Bali.

 

He paid a fortune before he got married for wedding pictures, so perhaps there's some elasticity in the prices there or at least he can undercut the enormous margins the existing firms charge, but from our conversations these kinds of considerations are completely alien to his thinking. All he's considering is being able to afford to lease a building that makes people say wow. How he and his two partners can possibly expect to get a return on this investment is perplexing. I don't think they care.

 

He told me that between the three of them, they've gotten together 200,000 rmb to open up an office in the city here. This is just a start up cost though. He hasn't even done any research to see if there is any potential clientele to justify putting forward that kind of figure.

 

Presumably this blase attitude towards financing is a result of what you're describing about the access they have to credit.

 

If even 30% of all entrepreneurs think like this then this country must be a giant house of cards. I think it's more than 30%. Maybe 60%. Maybe more.

 

It's quite terrifying to contemplate, but I'm sure he's completely indicative of the mindset of the rest of the people here.

9 years 14 weeks ago
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RandallFlagg:

I had no idea it was so bad. Huge personal debts combined with little monitoring of credit history? A recipe for massive economic disaster.

9 years 14 weeks ago
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dongbeiren:

I've known people like this too - girl who makes 15,000 a month and drives an Audi who is constantly in debt due to her triple digit shoe collection and flying to Beijing for the day when she feels like it. I've always thought of being in debt as a necessity of the poor but in many situations it's just people of all levels living beyond their means.

How many Americans living in 4 bedroom houses with 2 cars are swimming in debt? According to the numbers I've seen, a lot. I'd never do it but I'm not telling anyone how to live. Just don't come to me with your hand out when you lose your job and can't pay the minimum on your credit card bill that month.

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Posts: 928

Shifu

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Well, your average couple isn't going out and getting Hagen Das on a weekly basis. For the average person, I'd estimate a monthly hot pot venture (with friends) and a ice cream venture to represent the monthly expenses for eating out .

1,000 RMB pairs of shoes are bought a lot less often than you think. Next time when you're out, take a look at people's shoes. That's what the locals do to you - they look at you from head to toe in an instant! (They always see my ratty tatty running shoes, lol)

Most girls shop for medium level types of luxury brands that are around 500 RMB-ish... Think of a prominent Chinese brand, “Qian Bai Du," and you'll get the picture. They're nice shoes, without the 1K price tag. My GF has a very good job, but still follows this brand more than others. And for anybody that's a student - they're all just wearing old converse shoes that have been worn out for ages. I know graduate students that only have 500 RMB to spend every month. Lucky for Chinese people, their bodies are different - they can eat less. (laugh)

I'm more surprised about all the crap treats in the supermarket - 25 RMB for a box of wafer bars from Nestle - 16 RMB for 3 small trays of chips a'Hoy cookies (6 small ones in a tray, equating to nearly 1 rmb per small cookie!) I wonder, how could people ever afford these kinds of expensive crap treats? If you want to track spending, a lot of times you can get killed on these type of "hidden" expenses that you didn't conceive of as being expensive. I guess the obvious answer to this question is that Chinese prefer cheaper snacks that they grew up eating. That being said, I'm sorta surprised that Chips a' Hoy has a market here.

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Emperor

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I think you where bang on with the massive population.
The vast majority will splurge on a large purchase here and there and then suppliment the rest with cheaper brands.

My wife does that. She will shop exclusively at brands like Zara and H&M but have some Gucci and Prada and shit for a rainy day. Ill spend 20K on a leather bag for her and shes walking around with a 300 yuan one the majority of the time.

You obviously have rich people that drop hundreds of thousands a year which helps businesses. But i think population is key.

In a large city of say 3 million women of "shopping age" if half buy one or two stupid things a year thats still alot of shopping!!
Add the tens of thousands rich enough to buy it weekly and it adds up to a hefty number.

In China the 1% is still more people than whole cities in other countries.

dongbeiren:

This explanation makes a lot of sense - I still wonder how this mall with 20 empty stores in a row all selling the same home appliances can stay in business. I guess every few days a couple that just bought an apartment walks in and drops a few thousand rmb. Also, the price of goods is high compared to the rents so they probably don't need to sell THAT much to turn a profit.

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Posts: 421

Governor

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In my opinion, it's face.  I can't understand how people can spend more than a month's salary on a phone.  There's definitely a "keeping up with the Zhous," mentality.  I always find it amusing when some guy is blabbing into his phone like he's a captain of industry, while taking his seat on a dusty bus for 8 mao.

Eorthisio:

Yep, mianzi is everything here and people can't conceive a society without it, that's why Chinese people are so obnoxious, even if you don't care about face there will always be a moron feeling like he has to compare himself with you, trying (always failing) to point at your flaws to put you down and feed his ego.

 

For e.g. at the gym, I am working out, not disturbing anyone, earbuds on with some good tune, but there is quite often an idiot with self-esteem issues around to come on the treadmill right next to mine (when there are 10 other free treamill) then putting the speed at 1km/h faster than me to show off, except I am in a much better shape than those morons so they end up giving up after 10min thus having a massive loss of face.

 

Such things are everywhere, all the time in China and this is really annoying. I don't understand why people here (especially men) always need to compare themselves, to try to put down other people, they can't just mind their own business.

9 years 14 weeks ago
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laowaigentleman:

@eo

 

I have been spending the last three months going to the gym for an hour a day. I've improved a lot, although I'm by no means athletic.

 

In my home country I had a personal trainer who showed me how to go about exercising in a way that builds my strength and gives me good results.

 

It is always funny to see the guy with the ridiculous tattooed arms come in and pick up the dumb bells and start airboxing with them or something. Many gyms in the apartment complexes don't have trainers, so the people come in and have no idea how to use the equipment.

 

The worst thing is when a whole family come in and bring their children with them to play on the machines. I've had kids spinning around the gym here on rollerskates. It's funny because there is a sign on the slide at the playground not to let dogs go down the slide in case they damage it. All of the machines in the gyms here are top of the line American precor stuff. Surely worth at least 10,000 yuan apiece.

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