It's time to spend less on luxuries

09:50, May 20, 2010      

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According to Bain and Company, a global management consulting firm, consumption on luxuries in China has grown by 12 percent last year, accounting for 27.5 percent of the world's total. It's worth mentioning that nearly half of them were sent as gifts. It is estimated that in the coming five years, domestic consumption on luxuries will hit 14.6 billion, the world's top.

Sharp increase of consumption on luxuries is closely associated with the rapid economic development in China. Those who have gotten rich faster than others are capable to spend more on luxuries. However, huge domestic consumption on luxuries is incompatible with the fact that China is still a developing country, and it is not something worth showing off. The number and wealth of rich people in China are far less than those in the developed countries in Europe and Americas. So why do some rich people in China spend so much on luxuries?

The idea of face-saving is doing mischief in minds of many Chinese. Many of them treat luxuries as a kind of symbol of dignity and social class. Young people with a monthly income round 3,000 are willing to buy a Louis Vuitton bag with their half-year salary, let along the rich people. Mindless consumption, blind faith in things foreign, as well as influence from films and mass media, foreign luxuries are very popular in China.

Luxuries are usually sent as gifts. Money is not appropriately sent as gifts on some occasions, but luxuries are. It is well-known in China that those who buy expensive moon-cake do not eat it but send it as gift. It is also true for those who buy luxuries. The expensive commodities circulate among the rich and some of them go to officials, becoming the bargaining counters for power and money.

China has different views on wealth from the rest of the world. Most of the rich people outside China tend to attach more importance to social responsibility and donate part of their income to charity and education organizations. But, it is not true with those rich people in China. One of the reasons is that the tax-incentive mechanism in China is still imperfect and the rich people are reluctant to do charity.

The other reason lies in the fact that it is too easy for some of the Chinese to get rich because there are so many systematic loopholes. They often seek profits with illegal means and spend it like water.

Huge consumption on luxuries does not go with the China's current conditions and cause great losses of social wealth, and therefore should be restricted. However, imposing tax on the luxuries can hardly stop consumer practice in luxury goods. So other measures are needed in this circumstance. Media should promote practicing thrift as a praiseworthy activity and should regard living in luxury as shame.

Relevant departments should also step up efforts in adjusting income distribution and narrowing the gap between rich and poor. Legal building and a healthy order of market economic system can bring the possibility of making great fortune overnight and trading money to power to a minimum.

By People's Daily Online

(Editor:张心意)

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