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4 China’s new Consumerismlocked

4 China’s new Consumerismlocked

  • Daniel K. Gardner
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What Are Some of the Consuming Traits of a More Well-to-Do China?

As China’s GDP has grown, so has the wealth of its people. In January 2016 China was home to more billionaires than the United States (594 vs. 535). According to PEW Research, average income, perhaps a more meaningful marker, has quadrupled in the past three decades. China is becoming “middle class,” with roughly 300 million people earning what economists describe as middle- or upper-middle incomes (compared to just 40 million as recently as 2001). A 2013 McKinsey report estimates that by 2022 a full 75% of urban households will qualify as having middle- and upper-middle incomes, with the majority earning in the upper-middle-income range ($15,000 to $34,000 annually). As the Chinese economy and personal incomes have skyrocketed, so too, unsurprisingly, has consumption.1

The eagerness to acquire and consume should be understood against the pre-1970s history of scarcity. With the liberalization of the marketplace under Deng Xiaoping, people became freer both to sell and to buy. The revolutionary ideology of equality quickly gave way to a culture of competitive consumption. In his 1997 article “Consumerism, Confucianism, Communism: Making Sense of China Today,”2 Zhao Bin wrote, p. 44“As a new and ‘modern’ way of life, consumerism appeared irresistible to the hitherto materially deprived,” and described consumerism as “a para-belief system.” Zhao explained that the bankruptcy of Marxism-Leninism-Maoism had left an ideological void, which “consumerism” now came to fill.

In the 1980s there were virtually no private (nongovernment) vehicles in China; those were days when Flying Pigeon bikes fanned out over broad avenues and country lanes alike, ruling the country’s roads. Today, China has surpassed the United States as the largest automobile market in the world.

In 2000, China had just under 100 million mobile phone users; today there are more than 1.2 billion, four times the number in the United States.

In cities, the average floor space per inhabitant was 3.6 square meters (38.7 square feet) in 1978; today, even as the size of the urban population has surged, the average floor space per inhabitant is now 35 square meters (376 square feet), 10 times larger.

Between 1985 and 2002, China’s people were buying up washing machines, refrigerators, air conditioners, and color televisions. A recent survey showed that the growth of these appliances has leveled off (with 91 washing machines, 89 refrigerators, and 120 televisions per 100 households).3 These days the Chinese are turning their purchasing power to laptops, cellular phones, home computers, digital cameras, and other electronic goods.

The Chinese have also become the world’s biggest consumers of luxury goods. McKinsey reports that by the end of 2015 the Chinese will be responsible for one-third of the money spent throughout the world on “high-end bags, shoes, watches, jewelry, and ready-to-wear clothing.”4 And it’s not just the rich who are buying up these goods; a 2013 HKTDC survey found:

The middle class is still as enthusiastic about international brand name products as ever. 81% of respondents p. 45have bought international brands in the past year, while 37% have bought luxury products costing more than their monthly personal income. Among the different types of international brand name products purchased in the past year, garments rank first based on mention rates (74%), followed by footwear (57%), electronic products (41%), and handbags/wallets/luggage (40%).5

In the 20th century, global luxury brands were hardly available in China, except in luxury hotels catering to tourists. Now, as we head deeper into the 21st century, Louis Vuitton, BMW, Rolex, Gucci, Armani, Prada, Dior, Cartier, Tiffany, and Chanel products can be found in stores and shopping malls everywhere throughout the country. Cartier alone has 30 stand-alone stores there.

The fondness for consumption in China is reflected in the huge popularity of the country’s e-commerce market. Overnight, China has become the world’s largest online retailer. In 2015, online sales there hit $630 billion; the United States, the world’s second largest e-commerce market, had online sales of $340 billion.6

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What Does a Wealthier China Do in Its Leisure Time?

Shopping, clearly, is one popular leisure-time activity. But as the country’s income has grown, so too has the variety of leisure-time activities. Outdoor sports have become a passion, especially golf and skiing. In 2004 there were 176 golf courses in the country; even though in that year the government capped the number of courses that could be built, today there are roughly 1,000 courses. This is a sport for the well-heeled: a round of golf at a public course costs $150 or so, while membership in a private club costs about $150,000 (excluding monthly fees). No wonder golfing confers status in China; indeed, in President p. 46Xi’s anti-corruption campaign, golfing intermittently comes under attack for its profligacy.7

Then there is skiing—in a country that has relatively little snowfall. In 1996 there may have been 10,000 skiers in the entire country; today, according to the Chinese Ski Association, the number has swelled to 20 million. Like golf, the audience for the sport is the relatively rich, as a one-day lift ticket and gear rental costs over $100.

More leisure time has resulted in more frequent gatherings with family and friends. In the 2013 HKTDC survey mentioned above, 73% agreed with statement, “I now spend more of my free time with family/friends.” The survey also revealed that friends and families are dining out more, going to movies, and taking many more weekend excursions into the countryside.

Theme parks have become a major leisure attraction in China. In 2013 they drew 166 million visitors; by 2020, the global architecture firm AECOM predicts, that number will reach more than 220 million. In China Theme Park Pipeline Report 2013, AECOM writes, “Based on increasing population in the middle and upper income groups, and booming tourism, we expect the theme park market to have doubled in size from 2010–2015, and nearly double again from 2015–2020. By 2020, theme park attendance in China is projected to exceed that of the US market today.”8 Roughly 60 new—and large—theme parks are scheduled for construction in China by 2020. International companies like Six Flags, Universal, and Disney are eager to get in on China’s theme-park action. The Shanghai Disney resort, which opened in June 2016 at a cost of more than $5.5 billion, occupies a jaw-dropping 963 acres (1.5 square miles) of precious Shanghai land.

With more money and more leisure time at hand, the Chinese have become enthusiastic travelers, both domestic and international. Visiting family and friends, sightseeing, and shopping are the main purposes of leisure travel. By 2008, the Chinese had already taken to foreign travel, logging more than 48 million outbound trips in that year. In 2013, just 5 years p. 47later, that number had doubled to 98 million, with 100 million expected by the United Nations World Tourism Organization by the end of 2016. Not only do the Chinese constitute the largest group of world travelers, but they are now the top per-capita spenders when traveling abroad, having displaced the Germans and the Americans. Domestic travel is on a steep rise as well: in a population of 1.3 billion, 1.7 billion domestic trips were taken in 2008, increasing to 3 billion in 2012.

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What Are Some of the Environmental Consequences Associated with the New Consumerism?

There are some obvious environmental consequences, even if they cannot all be precisely quantified.

Cellular phones, computers, televisions, microwaves, and other electronic gadgets and appliances all require energy, which today is largely generated by fossil fuels, especially coal. And when these goods die or are rendered “obsolete” by updated versions, they end up as waste in landfills. Landfills in Beijing are already full, which is why Beijing and other cities have moved forward, often against considerable opposition, with the construction of incineration plants. Chemicals leaching into the landfill ground contaminate the soil and also can make their way into the groundwater and nearby waterways. “E-waste cities” like Guiyu (see Chapter 1), which once treated mostly foreign waste arriving on ships, now treat waste generated in China.

Housing units, especially in cities, have grown more numerous and capacious. Their construction has frequently come at the expense of arable land, thus contributing to the growing threat to the country’s food security. New housing has also contributed to urban sprawl and to the increase in the number of cars on China’s roads and their polluting emissions. More cement, more steel, and more wood are all needed in the construction of new housing. And, of course, since the new housing units are larger, more energy—and more coal—is p. 48required, not simply to build them but also to heat, cool, and light them and to keep the appliances running. Finally, new housing, which tends to be fully plumbed, is a heavier drain on water resources than unplumbed traditional housing (20 or 30 gallons per day vs. 10 gallons).

China’s new consumerism can also have direct environmental consequences for other countries. The Chinese fondness for carved ivory has made the country the largest ivory market in the world; as such, China must bear some responsibility for the ongoing decimation of the world’s elephant population. Every year 30,000 African elephants are killed for their tusks; the population has shrunk to 400,000 or so, down from 1 million in the 1970s. (The government recently announced its intention to impose a complete ban on ivory trade by the end of 2017.) Similarly, demand among affluent Chinese for imperial-style furniture made of precious rosewood has led to the depletion of rosewood forests throughout Southeast Asia and Africa. Take Malagasy rosewood, a species native to Madagascar: today only 1% remains in Madagascar, and 98% has made its way, illegally, to China.9

The new leisure activities have environmental costs as well. Theme parks and golf courses eat up land that could be used for food production. A typical 18-hole course in China requires about 173 acres of land. The constant watering that the courses require—in a water-scarce country—makes them a particular environmental liability. And, of course, with the watering comes the constant application of fertilizers and pesticides. Since 2004 the government has intermittently imposed limits and bans on the construction of golf courses (though has not rigorously enforced them). Like golfing, the growing obsession with skiing constitutes a drain on China’s limited water resources. Many of the ski resorts are located in the northeast, outside of Beijing, an arid region with often little snowfall. Thus, skiing is possible only because of manmade snow. At one resort for which we have figures, annual snow production p. 49requires an amount of water equal to the annual water use of 42,000 people.10

With domestic and international travel doubling since 2008, the number of miles logged in high-speed trains, planes, and cars has shot up, resulting in increased consumption of fossil fuels and thus boosting China’s contribution of carbon dioxide, nitrous oxides, black soot, and PM2.5 to the atmosphere. In short, the leisure-travel trend of recent years is adding to both global climate change and China’s more local air pollution crisis.

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What Is the Status of the Automobile in China?

Before 1980 there was hardly a private car in China. Today, China represents the largest automotive market in the world (in 2016, 24 million units were sold in China vs. 17.5 million in the United States) and has more cars on its roads (approaching 200 million) than any country except the United States. People have eagerly given up their Flying Pigeons and pedal power for domestic- and foreign-made automobiles. The cost to the environment, especially in larger cities, has been huge. According to a 2017 Xinhua report, in Beijing, where smog routinely shuts down schools, grounds airplanes, and sends children and the elderly to emergency rooms with respiratory problems, car emissions account for some 31% of the PM2.5 in the air.11 The only larger source of carbon dioxide and PM2.5 is emissions from coal-fired power and industrial plants.

As China’s economy grew with Deng’s program of liberalization, and as the Chinese people increasingly aspired to become “modern,” modeling their lifestyle on that of already developed countries, the bicycle became unfashionable, a symbol of the country’s “backwardness” and hardship. In the 1980s the government itself began promoting both the use and manufacture of cars. Designating automobiles a “pillar industry,” the state poured subsidies into domestic car production and invited foreign auto firms like AMC, Volkswagen, p. 50Honda, GM, Honda, and Toyota to come to China and forge joint ventures with domestic manufacturers. Thus, early on, foreign brands were more readily available than domestic ones, and they are still favored by Chinese consumers today (in 2016, 6 out of 10 cars sold in China were foreign-made).

Prior to Deng’s reforms, cars were not much of a necessity. Citizens were assigned to a danwei, a unit that provided, in one general area, work, housing, schooling, health care, child care, and cultural activities. There was no need for commuting; the Flying Pigeon met the quite limited transportation needs of the day. But as Mao’s collectivization experiment came to an end and the market economy expanded, people’s workplaces became separated from their homes. And as cities grew, the distance between home and workplace frequently grew. Bicycles, because of their affordability, remained a popular mode of transportation, but public transportation, especially bus serv­ice, now appeared. By the late 1980s, taxi service also became available, at least in some of the bigger cities, though ridership tended to be limited to tourists and foreigners.

With urban populations growing, and with urban zones expanding, the government in the late 1980s and 1990s began building extensive subway systems in cities like Beijing, Shanghai, Guangzhou, and Nanjing. And as cities have continued to sprawl, the government has struggled to construct new lines to keep up with rider demand. As wide-ranging as some public transportation networks have become (see Chapter 11), many Chinese still live beyond the reach of public transit, and so turn to motorized bikes and automobiles.

It would be misleading to suggest, though, that automobile ownership in China has exploded out of necessity alone. For many, cars represent freedom and comfort, being able to go where you want when you want, sitting in a comfortable seat rather than standing on a bus or in a packed subway car with your face smashed against the window, listening to the music of your choice, with the temperature at just the right p. 51setting. As Zhu Chao, a website engineer in Beijing, put it in a Washington Post article: “I really like what the car brings to my life—convenience, freedom, flexibility, a quick rhythm. I can’t imagine life without it.”12

Car ownership also brings status: the car has become a centerpiece of China’s competitive consumerism.13 “People don’t really think about whether they need a car, but feel they have to have one,” car aficionado Zhao Cihang (owner of two BMWs, an Audi, and a Honda) told a reporter as he strolled through a Mini showroom in Beijing. Indeed, it’s China that is keeping much of the global auto industry vital: “For GM, Hyundai, Nissan, Volkswagen, Audi, it’s already the number one car market in the world. Take China out of their portfolio and their fortunes would reverse,” says automobile analyst Michael Dunne.14 In the past decade, escalating incomes have made the Chinese among the world’s most eager consumers of luxury-brand automobiles, as the showrooms for BMW, Lexus, Infiniti, Cadillac, Land Rover, Lamborghini, Porsche, Rolls-Royce, Mercedes, and Audi along the country’s city streets attest.

Since 2009, sports car clubs for the super-rich have sprung up all over China. Perhaps the best-known one is the Sports Car Club of Beijing, which had its start in the capital and now has branches all over the country. To become a member, one has to pay an annual fee of $1,600 and own a qualifying sports car. In the Beijing branch of the club, a $220,000 Porsche SE 911 is considered an “entry-level” model.15

The country’s love affair with the car has made congestion a massive problem (Figure 4.1). With nearly 6 million cars on Beijing’s roads and 3.5 million on Shanghai’s, drivers in those cities, among others, spend more time idling—spewing out deadly exhaust—than they do driving. To get from one side of the city of Beijing to the other can easily take a couple of hours at rush hour. In a 2012 race across Beijing from west to east, a distance of 6.2 miles, a bicycle beat a Porsche by roughly 30 minutes.16

Figure 4.1 Traffic jam near a toll station in Beijing

p. 52But even as municipal governments have taken measures to limit automobile use (see Chapter 11), the country has vastly expanded its expressway network. The country’s first expressway, the Shanghai–Jiading Expressway, opened in 1988 and was 17 kilometers (11 miles) long. By the end of 2014, the expressway system covered 111,950 kilometers (69,560 miles) and had overtaken the American system as the world’s largest. This has meant paving over land that could be used for other purposes and creating tens of thousands of miles of impermeable surfaces, reducing the amount of rainfall and snowfall that can penetrate into the groundwater.

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How Have Food-Consumption Patterns Changed?

Through the 1970s, prior to the economic reforms, the Chinese lived largely on a grain-based diet. That has changed. Meat consumption since then has risen four-fold to about 130 p. 53pounds per capita annually (82 pounds of pork, 29 pounds of poultry, and 20 pounds of beef). China now consumes about one-quarter of the world’s meat, and twice as much as the United States (though per capita consumption in China is half that of the United States). City dwellers in China eat almost twice as much meat as those who live in the country; thus, as the pace of urbanization quickens in the next decade, we have to assume that China’s meat intake will continue to escalate (Figure 4.2). Two main factors are driving this dietary shift to protein-rich foods: greater discretionary income and wider exposure to Western cuisine.

Figure 4.2  Meat Consumption in China and the United States, 1960–2012

Source: USDA

While more protein might be nutritionally beneficial for the Chinese people, the new diet poses a range of problems for the environment. Raising livestock requires land, especially for cattle. Deforestation is one way to provide it; another is to give up land that might otherwise be used for growing crops for human consumption. In addition to the land necessary to raise the animals, land for growing livestock feed is necessary. To produce 2.2 pounds of beef requires 17.6 pounds of feed; p. 54pork requires 13.2 pounds of feed; and poultry requires 4.4 pounds. Because of land scarcity, China has had to turn to foreign markets for grain and soy to sustain their meat consumption. Sixty percent of the world’s soybeans available for export are purchased by the Chinese. Much of this is coming from Brazil and Argentina, where grasslands and forested areas, including rainforests, are being cleared for soy farming to meet the demands of the Chinese market, thus reducing the world’s precious carbon sinks (62 million acres in Brazil are now being used to produce soy).17 Brazil is also giving more of its land over to the cultivation of corn as China’s demand for corn balloons.

The growing livestock population is also resulting in a growing amount of fecal waste: a cow produces 45 to 75 pounds per day and a pig 10 to 13 pounds per day (a person produces one-quarter of a pound). This waste contains an enormous concentration of phosphorous and nitrogen, which is dumped, or runs off, into waterways, resulting in algal blooms, eutrophication, and then “dead zones.”

Globally, livestock produces 14.5% of all anthropogenic greenhouse gas emissions. It accounts for 65% of the nitrous oxide and 37% of the methane released into the atmosphere. The implication is clear: China’s growing appetite for meat is adding appreciably to global warming.

Some recent studies have calculated what they call the water footprint for various animals, which is the amount of “freshwater used to produce the product, measured over the various steps of the production chain” (i.e., feedcrop cultivation, livestock farming, food processing, retailing, consuming).18 The following water-footprint figures suggest that meat consumption is taking no small toll on China’s limited water resources:

One broiler chicken: 6,868 gallons/year

One pig: 137,369 gallons/year

One beef cow: 166,428 gallons/year

One dairy cow: 543,138 gallons/year.

p. 55The percentage of pork consumed in China is decreasing, while the percentages of poultry and beef consumption are increasing. Environmentally, this is an unfortunate development. An important 2014 study of livestock production in the United States concludes that beef is by far the least resource-efficient meat, requiring 28 times more land and 11 times more irrigation water per megacalorie than pork or chicken; it also produces 5 times more greenhouse gases. When compared with the production of staple crops, the figures are even more startling: beef requires 160 times more land and 8 times more irrigation water per megacalorie and produces 11 times more greenhouse gases.19 One expert, having read the study, commented that “the biggest intervention people could make towards reducing their carbon footprints would be not to abandon cars, but to eat significantly less red meat.”20

If we assume that these figures from the US study can be roughly extrapolated to conditions in China, the current dietary trend there toward red meat does not bode especially well for either China’s environment or the global environment.21