MaLianfaandhiswifeWangLulongcheckthefamilyexpensebookinAprilinQingdaoCity,eastChina’sShandongProvince.Theystartedtowritedowndailyexpensesin1978,thefirstyearChina’sreformandopeningupwasimplementedXINHUAGaoYuningfindsithardtoexplaintohisstudentswhowereborninthe1990sandbeyondwhyChinesepeopleusedto“buy”productswithfoodstamps.
“MyyoungChinesestudentsmayhaveheardfromtheirparentsaboutwhatlifewaslikeinthatperiod,butformystudentsfromtheWest,theyhavenoideaatall,”GaotoldBeijingReview.“Theuseoffoodstampswasbasedonashortageeconomy.”Gao,inhislate30s,receivedhisPhDineconomicsfromtheUniversityofCambridgein2011andcurrentlyworksforBeijing-basedTsinghuaUniversityasanassociateprofessor.
Beginninginthe1950sandlastinguntilthe1980s,ChinasufferedsevereshortagesoffoodandgoodsasthecountryfocusedonpostwarreconstructionafterthefoundingofthePeople’sRepublicofChinain1949.Throughoutthecountryandineveryhousehold,peoplelivedafrugallifestyle.TheCentralGovernmenthadtoissuevariousrationbooksforpeopletoreceivefoodandlifenecessities,includingoil,meat,clothesandbicycles.Thissystemensuredthatthedistributionofsupplieswasdoneonasequitableabasisaspossible.
Thingsbegantochangein1978,thefirstyearofreformandopeningup.Structuralreformswerecarriedoutinruralareasandcities;privateenterprisesbegantoboomandthemarketeconomybecamemoreactive.RationcouponsfinallystoppedbeingissuedandbecameapartofChina’shistoryaround1993,markingtheendofashortageeconomy.
GaodescribedthethreemainstagesChineseconsumershaveexperiencedinthepastdecades.First,duringtherationcouponera,peopleunderwentshortagesandgrewtoknowsufficiency.Inthe1990s,theybegantoaccumulatetheirwealthandpreferredmoreratherthanless,andbiggerratherthansmaller.Inrecentyears,Chinesepeople,particularlyinbigcities,havestartedtoseekahigherqualityoflife,materiallyandspiritually.
FollowingJapanandtheUnitedStates,agrowingnumberofyoungurbandwellersinChinachoosetofundtheirlifestyleswithinstallmentpaymentsasthecountrygrowsfromshortagestoaffluencewithalargermiddleincomegroup.
Generationgap
IncurrentChinesefamilies,itisapparentthattherearemanydifferencesbetweenparentsandchildrenaroundconsumptionandtheirderivatives.InSeptember2017,whenAppleInc.openedreservationsforitsiPhoneX,itwaslikeacarnivalforChinesemillennials.
“IhatetohesitatewhenIseesomethingIwant.Ineedtohaveitnow,”ZhaoQijun,oneoftheChinesemillennialurbanconsumerswhoarejumpingontothebuy-now-pay-laterbandwagon,saidtoChinaDaily.“Ireallylikehowitscameraiscapableofmakingphotoslookmuchmoreprofessional.Icannotaffordtomissoutonthephone.”
Actually,Zhaocouldn’taffordthesmartphoneatits$999pricetag.Butitwasn’taproblemforthe25-year-oldbecauseconsumercreditservices,likeChinesetechgiantAlibaba’saffiliateAntCheckLater,allowuserstopayfortheirpurchasesininstallments.
Attheendof2017,productspurchasedbyinstallmentrangedfrom3C(computer,communicationandconsumerelectronics)itemstodailynecessities,accordingtoareportbyFenqile,aninstallmentshoppingplatform.Thismethodofpayment,however,lowerscustomers’sensitivitytoprices,makingitmoreacceptabletopurchaseexpensive,qualityproducts,saidthereport.
IncontrasttoZhao,whoispayingforin-stanthappiness,somepeopleprefertobuyadreamviainstallments.ZhuGuangyuanwasbornintheruralareaofChifengCityinInnerMongoliaAutonomousRegion.Hisdiligenceledhimtoacollegeintheregion;however,aftergraduation,hefoundhimselfunemployed.
AnenrollmentnoticefromaBeijingbasedcomputertrainingorganizationcaughthiseye,buthecouldn’taffordthetuitionfee.Forhim,aninstallmentplanwasthebestchoiceatthetime.Byborrowing16,300yuan($2,400)fromaninstallmentplatform,Zhuonlyhadtopaypartoftheinterestforthefirstsixmonthsandthecapitalandtherestoftheinterestintheensuing12months.Thetrainingwasactuallyapreludetohisfindingadecentjobinhishometown,makingitpossibleforhimtoeventuallybuyhisownapartmentthere.
“It’seasiertopaybackwithinterestthantoborrowfromfriendsasafavor,”ZhusaidinadocumentaryaboutyoungChinesepeoplewithalifestyleofconsumingtodayandpayingtomorrow.Traditionally,peoplelendmoneybasedontheborrower’sreputationandtheirleveloffamiliarity.Therefore,thosebornrichorwhohavemoneyhavemanymoreresourcesattheirdisposal,makingthismethodunfair.
GaodescribedaprofoundchangethatistakingplaceinChinafromasocietyofpersonalrelationshipstooneofindividualcredibility,whichwillmaketheevaluationsystemmoreobjectiveandfairer.
InasurveyconductedbyAntFinancial,mostyoungurbanpeoplesaidtheywerecomfortableborrowingmoneytofundtheirlifestyles.Thisincludedtakingenrichmentclasses,attendinggymclassesandeventippingonlinebloggers.Inaddition,FenqilereportedthisyearthatthepatternofinstallmentpaymentusageismovingfromfirsttiercitiesinChina’scoastalregiontosecondandthird-tiercities.
“Thisphenomenonislargelyduetothefactthatmillennialsaregrowingupinanenvironmentofsurplus,”explainedMeiFeng,ViceSecretaryGeneraloftheBeijingYouthChamberofCommerce.
InGao’sview,youngpeoplehaveabroadersenseofproductswhichincludenotonlytangibleitems,butalsoservices.“Theyarewillingtopayforthehappinesstheymayacquirefromanitemorexperience,”hesaid.“Whiletheoldergenerationmaystillconsiderwhethertocatchataxiortakeabuswhenitcomestobuyingaservice.”
Consumptionupgrade
Historically,Chinaisnotuniqueintermsofitscurrentconsumptionupgrade.Asaresearcherwithamainfocusoninternationaleconomicsanddevelopment,GaocomparedChina’scurrentdevelopmenttotheUnitedStatesinthe1920sandJapaninthe1970s80s.
“Inthe1970s,theJapaneselanguagewaseverywhereinItalianluxurystores,”Gaosaid.“AndtheU.S.magazineNationalGeographicboomwasduetoitsdomesticdemandforoverseastourism.”
Currently,China’sfashionconsumptionaccountsfor30percentoftheworld’stotal,makingitthetopluxuryconsumercountry,accordingtoChenWenling,chiefeconomistwiththeChinaCenterforInternationalEconomicExchanges.Shesaidfashionconsumptionbymeansofoverseastravelore-commerceplatformsisoneofthemaincharacteristicsinthecurrentconsumptionstructuralchange.
Themainreasonbehindtheconsumptionupgrade,fromtheperspectiveofeconomicdevelopment,isthechangeinthecountry’sincomestructureduetoitseconomicgrowth.Theemergenceofamiddleincomegrouphasbecomethemaindrivingforceoftheconsumptionupgrade.Whathascomewiththeincomestructureupgradeisthetendencyforpeople’sconsumingpreferencestobedifferentiated,accordingtoGao.
Alongwithhigh-endconsumption,therecentpublicofferingofChineseunicornPinduoduoalsoremindstheworldoftheincreasingconsumerpowerofalargenumberoflow-incomeChinesepeople.
“Theconsumptionupgradedoesnotonlyrefertothemiddle-incomegroup,”Gaosaid.“Itiswhatismeanttobuildamoderatelywell-offsocietyinallaspects.”
China’sConsumptionSinceReformandOpeningUp
Note:Engel’scoefficientmeasuresthepercentageofincomespentonfoodandisusedtoreflectacountry’sstandardofliving—thelowerthepercentage,thehigherthestandardofliving.
(Source:NationalBureauofStatistics;designedbyPamelaTobey)
CopyeditedbyRebecaToledoCommentsto