Monday, 3 May 2010
A Smart Buy? Or a Slippery Slope
I was intrigued this month to receive a leaflet in the post that reminded me of Littlewoods catalogues in the UK back in the 1970’s. It contained pictures of the very latest computers, cameras and mobile phones, but at amazingly affordable prices. How was this possible? Simply pay 12 equal instalments and receive the latest iPod, camera, smart phone or computer today, without having to save up first! This in China - a country which has boasted one of the highest savings rates in the world, and where the notion of debt for any purchase other than a house is still viewed with disdain by most people over the age of 30.
What does this tell us about today’s China? Actually it reveals more than you might think:
1. SELF CONFIDENCE. Never before has there been a generation of Chinese more certain of their destiny. There is a universal belief that China will regain it’s rightful place as the most powerful and important country on the planet – a position it has previously held for thousands of years (apart from the unfortunate hiccup of the last three hundred years).
2. TODAY, NOT TOMORROW. In the eight years that I have lived and worked as a marketeer in China it has all been about tomorrow, not today (and certainly never about yesterday). Well, it seems tomorrow has finally come with China no longer willing to wait for the trappings of success.
3. DISPOSABLE VALUES. The traditions and values that have helped make the People’s Republic of China what it was and is are disposable when they do not suit the aspirations of these same People.
And who is behind such a polar shift in Chinese values? None other than the Bank of China, who proudly head up their supporting website with a special “Smart Buy” logo (http://www.boc.cn/sdbapp/cmg/ )
So what this REALLY tells us about China is that these changes are permanent. This is a sea change. The many generations of cautious, prudent savers are being replaced by a new generation of spoilt, flashy debtors. And this is the same generation that already has unrealistic expectations of life resulting from the “Little Emperor” effect of the one child policy, where 6 adults dote and provide for every whim of every child. These young adults with an unbridled appetite for gain with no pain will no doubt lap up this new way to buy the latest “must have” gadget, ensuring the success of this and the inevitable clone credit schemes which the other banks (and switched on retailers?) are already crafting/launching.
Congratulations China. You have started down the same slippery slope that got the rest of the world into the mess we are still clearing up. Until now, I really did believe that China might just tread a new path.
David King
Shanghai, 25th April 2010
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