The meteoric rise of Chinese consumerism will reshape the world, and maybe even destroy it

China's Transition
China's Transition

When China was still largely rural, poor, and socialist, politicians exhorted the country’s people to patriotic activities such as increasing grain output for their economy’s sake. Now, to sustain China’s economic boom, the country needs good citizens to go shopping.

And the people have obliged. Between 2000 and 2010, consumption in China multiplied from about $650 billion to nearly $1.4 trillion, and the country’s big spenders have become notorious for ravenously gobbling up pricey Swiss watches and high-end handbags. Today Chinese shoppers’ appetites extend well beyond China’s borders, and can sway the fortunes of global fashion labels. Japan even coined the term bakugai to refer to an explosive shopping spree by Chinese tourists. The spending power and influence of China’s consumers will only grow as China’s middle class continues to rapidly expand.

Karl Gerth, a history professor and the Hsiu Chair in Chinese studies at University of California-San Diego, has spent years studying Chinese consumerism. He is the author of As China Goes, So Goes The World: How Chinese consumers are transforming everything, and is working on another book that will look at consumerism’s gestation period during the Mao era. Quartz asked for his views on how China’s consumer culture is positioned to affect the future of the global economy.

The interview has been edited and condensed for clarity.

How important is consumerism in China now?

I don’t know how to pin this down exactly, but when I say, “What is the Chinese dream?” I think the Chinese dream is the American dream plus 10%. It’s not the European dream of restraint and conservation. I think they’re closer to Americans. They want even more, bigger, better—as a generalization of course.

The general awareness of brands and the hierarchy of brands is much greater than people who actually have any shot in hell at owning those things. I think the general awareness of brands means that a larger community of people are able to communicate, and understand what’s being communicated, through the ownership and possession of those specific brands.

In your first book, you say that Chinese consumerism is shaping the world. How so?

We’ve known for a long time that what’s popular in America, lo and behold, often becomes popular in the rest of the globe. If, however, multinationals are getting most of their growth out of the Chinese market, then they’ll be orienting their R&D more towards Chinese consumers. That taste will be at the cutting edge, or dictate what tastes become like in other parts of the world.

We used to see this in telecom, like having more than one SIM card so that you could either cross the Hong Kong border and not have to swap as people have to do, or have one for your home, one for your work. That was first of all for the Chinese marketplace.

Is there a specific variety of consumerism you see in China that is different from Western consumerism?

The average age [of a high-spending consumer] in China is significantly lower because they have much greater access to material goods at a younger age, thanks to that 4-2-1 family structure [as a result of China’s one-child policy]: one kid having the benefit of two parents and four grandparents, so disposable incomes are much higher.

Two, anything to do with China is the speed at which all this has occurred. What would the outcomes of that speed be? People wouldn’t have as many brand associations. Those brand associations would have built up in relatively short amount of time, as opposed to [being] handed down intergenerationally. Because of that speed, the amount of anxiety about having the right brand would be greater in that environment than in a place where this is unfolding slowly.

The other characteristic is that there would be some pushback against everything being about creating individual identity, as opposed to your family identity. I’ve been studying how the entire Mao period from ’49 to ’78 was basically selling people on what I’m going to call collective consumption. So “Look at that wonderful bridge we’ve built.” You’re supposed to take joy or pleasure in, you know, national grain outputs. From my point of view, [this] is maybe the biggest version of collective consumption on the national level, as opposed to collective consumption on the smaller or local level.

How has the government been involved in promoting consumption?

How does a country that doesn’t have cars suddenly become—within 10, 15 years—the world’s largest consumer and producer of cars? The assumption is that’s a spontaneously occurring phenomenon once big government, as we would call it the United States, gets out of the way and DNA kicks in. There is some element of that.

But I would say that the compression, and the creation of a huge demand for cars—or insert your favorite industry here—has a lot to do with state involvement, and the state needing newly minted middle-class Chinese to want to buy cars, partially as a way of stimulating their own domestic car industry.

When did modern consumerism start to emerge in China?

The obvious conventional answer that I’m trying to overturn in my next book is with the reform and opening up under Deng Xiaoping’s policies from 1978 forward. In 1978, Deng Xiaoping says something along the lines of “First allow some people to get wealthy.”

The change there is that Chinese now see demand, in other words consumer desire, not as the death of production but rather as the start. Stoking consumer desire is one way of generating economic growth, rather than just, as socialist countries famously did, making steel and other producer goods ad infinitum as an end in itself. They push the idea that the way to make China wealthy and powerful is to stimulate consumer desire and allow economic inequality.

But you believe the seeds of that way of thinking preceded 1978?

I’ve been looking at, for instance, the three big ticket items that nearly everybody across China wanted [during the Mao era]: a sewing machine, a bicycle, and a wristwatch. You can see all kinds of examples of the lengths that people went to not only get those things, but also to get the right bicycles

This consumer awareness of mass-produced brands, or identity creation through the acquisition of those brands, it was heavily suppressed but it was always there. Those floodgates are open after 1978, but it wasn’t like it was created out of nothing.

What do you see as the consequences of this boom in Chinese consumerism?

I think that China is a giant Rorschach test. You can look at it and see positive and negative in quite dramatic measures. Call me old-fashioned, but I think planetary survival trumps many other things, and therefore my Rorschach test largely comes up as negative.

There are epic amounts of air pollution, so much so that every person I know who lives in a Chinese major city, their go-to app is to figure out how dangerous the air is that day, and what they should do about it. That is hugely a consequence of of car pollution, plus all the other pollution as a consequences of them going down this developmental path.

But I could easily interpret that same splotch as positive by talking about the ability to create a very different identity for yourself, the ability to enjoy stuff that you hadn’t previously enjoyed. Others should also realize that China is coming from a land of huge scarcity.

I would be slightly more tolerant of them wanting a small fraction of what the average American has before telling them that it’s an empty, vacuous existence and that they should focus on satisfying their inner desires through meditation rather than through Big Macs.

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