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Mooncake economics

By Matthew Jukes (Global Times)

09:11, August 30, 2011

Every time I read the news, it's nice to remember how much this country has changed. The words of one bygone eccentric suggested that the Chinese people were invincible, but then he probably never banked on the kryptonite that plagues Chinese society. Money.

With money, you can destroy just about every aspect of the Chinese physiology and psyche. Screaming at a taxi driver will get you nowhere except down the path to frustration, but damage his taxi, even 20 yuan ($3) worth of scratch and you'll see just how vulnerable and weak the average person is to the point they'll break down into uncontrollable violence or tears.

It's actually pretty difficult then, without breaking the law, to upset the general populace when it comes to money. In Beijing, people are pretty economical, they spend just what they need. Unless they're in the class of the brain-dead super rich, who rarely venture outside of flashy KTV parlors and upmarket restaurants you're unlikely to see someone who's willing to place themselves in financial jeopardy for the sake of a whim.

This is particularly helpful for a country that is trying to build an economy for itself, relying on consumer spending to keep the wheels ticking over, rather than American industry and exports. It's pretty difficult to force people to throw money away when they're so sensible, particularly when you have the advertising and communication skills of a comatose leper.

Enter the mooncake tax, the one-stop solution for forcing people to pay money into the economy that would otherwise not have made it. The new tax (yes, it is real) means that every time an employer "gifts" an employee with a box of moon cakes, the employee is charged a fee according to personal income allowance.

Festivals are the only time of year that the Chinese people spend frivolously on completely unwanted crap, in workplaces, homes and generally in the streets. Nobody can actually eat mooncakes, nobody actually wants mooncakes, but come July, like those terrible Christmas sales that start months early, the country is flooded with them.

So in order to make a profit on what in reality is a few grams of dough mixed with soggy cardboard bits, why not charge people every time they are given a box of mooncakes? Let's tax our employees every time we give them a gift.

That's not to say that people are completely stupid, and the microblogs are already throwing up people complaining that the tax far supersedes the production cost of the finished items, but we will have to wait and see if anybody actually returns their mooncakes to their employer. And what of the numerous boxes sent by grateful "clients" to officials? Are they tax free? It looks like pomp, circumstance and tradition means that they've actually found a way to milk the populace from behind.

This isn't strictly the beginning either, back in June, when the thoroughly enjoyable Dragon Boat Festival was getting into swing, I jokingly covered the fact that zongzi had gone up in price in line with some rather shady production costs. The end result is that the farmers made a little more money, as did their overseers and the economy.

Were people outraged that a long standing festival tradition was now leaving them out of pocket? Well slightly, but that wasn't going to stop them, as zongzi were an essential part of the festival, no matter how much like slurry they tasted, and money be damned.

This may very well be the trick that liberates the economy from its American dependence. Sure, the Chinese people may not be "real consumers" but they will throw money down a pit every special occasion. All that's needed is a firework tax at Spring Festival (bloody good idea regardless actually), paper and broom tax during the Tomb Sweeping Festival and a tax on the color red around October and you'll have a celebrating society, booming economy, and penniless people.

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