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Review: As China Goes, So Goes the World

The Chinese consume but do not set trends

books Updated: Jan 06, 2012 19:24 IST

As China Goes, So Goes the World

Karl Gerth

Hill and Wang, New york

Rs 299 pp 258

Everybody loves the Chinese consumer. Beijing hopes they will wean the nation off exports. The West hopes their appetite for luxury will salvage  economies. Macroeconomists say they alone can rebalance the world. Greens pray they won’t follow the scorched-earth policies of their western counterparts.

Karl Gerth’s central thesis is that “Chinese consumers are becoming the new vanguards of global consumerism”. Already setting the world standard in terms of volumes, the knock-on economic and environmental consequences are well-recorded. But Gerth argues the Chinese consumer is starting to do the same when it comes to defining trends. In the 1970s, the Chinese emerged blinking from the bicycle-and-wristwatch Maoist era into the fluorescent light of today’s shopping mall mayhem. Forty years later, the Chinese are maniacal buyers — they spend twice as much time shopping as Americans. “What did you pay for that?” is the second commonest greeting in China.

This hedonism is not unexpected given a past of repressed materialism and much newfound wealth, but there is no shortage of push from Beijing. Gerth argues that while this is mostly about a desire to reduce Chinese dependence on Western markets, there is a strong case for saying this is part of a one-party system’s “bread and circus” strategy.

The subtitle, ‘How Chinese consumers are transforming everything’, seems self-evident. At the end of the book, strangely, one is underwhelmed. Yes, China’s racing through the world’s energy resources but mostly for its oversized heavy industries, not saucepans and spoons.

Chinese consumers fall well short of being global trend-setters. Gerth shows how Taiwan and South Korea help set the pace for Chinese consumers. Chinese may mix their whiskey with green tea — but there doesn’t seem to be any ripple effect. Firms like Chery and Haier may be fast-growing but are still Sino-centric.

The book is interesting in its description of how capitalism and wealth-creation returned to China. This was a revolution: traditional Chinese culture was deeply hostile to money. One of Mencius’s saying was “one cannot become wealthy without being unjust”. Gerth argues businessmen are still disliked in China. Why? “The Chinese generally despise the rich not for their extravagant or wasteful consumption, but because their wealth was acquired dishonestly.”

What comes through is that a large part of Chinese capitalism is still about party connections and the skimming of government assets. “Most of the wealthiest Chinese are not rags to riches entrepreneurs or the beneficiaries of inherited wealth, but rather political insiders who have peddled their influence to gain new affluence,” writes Gerth. Even the rampant culture of counterfeit products is a consequence of politics, the “ongoing and irresolveable tension between national and local interests.”

This is a revealing book but it is most interesting in describing how consumerism, or even capitalism, is transforming the Chinese. The Great Chinese Material Revolution remains mainly a domestic story.