China has become one of the world's largest consumers of luxury cars, and many luxury automakers are racing to grab a piece of the market share. The latest statistics show that while BMW Group's global vehicle sales decreased by 19 percent, compared with the same period last year, its sales in China increased by 26 percent, according to the Qilu Evening News.

When the financial crisis put a damper on European, American and Japanese demand for luxury brands, the Chinese market for luxury goods remained stable. At present China's consumption of luxury goods accounts for 25 percent of the global market, for the first time exceeding that of the United States, making China the second largest luxury consumer in the world.

Luxury is a product of wealth. Chinese extravagance on luxury goods has shocked even the wealthiest people in developed countries. While this may be a sign of increasing wealth in China, objectively speaking, we must admit that in this case, being ranked "world No. 2" is not something to be proud of.

Statistics from the World Luxury Association indicate that in 2007, China's luxury consumer population accounted for 13 percent of the total population, almost exactly matching China's distribution of wealth – often described as "20 percent of the population owning 80 percent of the (nation's) wealth." Thus, when we consider the Chinese luxury goods consumer, we need to also think about the tens of millions of underprivileged people in the country who consume less than US$1 per day. Moreover, the rapid growth of China's luxury goods consumption poses the possibility of a further enlarged gap between the rich and the poor. On the one hand, many worry about meeting food and clothing needs, while on the other hand many others live in excessive luxury. One cannot help but sigh at the inequality.

As we all know, insufficient domestic demand has always been a weak spot in China's economy. Ever since the financial crisis erupted last year, China has taken many measures to stimulate domestic demand. Luxury consumption, however, serves to increase the overseas market demand of developed countries, as luxury goods are in general produced by overseas enterprises. Therefore, jumping to the top of the list of luxury consumers, in my view, is not a good thing.

Edited 1 time(s). Last edit at 09/29/2011 03:54AM by Olive.

China have too many people, there are lots of the poor, but the people who afford luxury are not a very small amount.

There is a great poverty gap in china.
I'm poor.

If they have money, why not let them spend it ?

There are probably more 'millionaires' in china than the whole of Europe.

Don't underestimate the size of China or the wealth of ( some, and i agree the tiny minority )of the population.

Surely, it helps all economies, those producing, and those buying. The taxes on luxury goods in China is very high, accordingly the taxes get distributed to help the whole population.

Ronen
MYOFFICEINCHINA

It is a good sign actually, good for economy stimulation. At least some people still afford to buy something fancy.

This time I agree with you Savannah, without these luxury items being consumed, the world economies would spiral downward even faster than they are today. Causing a world economic disaster. Then the gap between the rich and poor in those other nations would grow at an even more faster pace too. The middle classes of all these other nations will also decline, be reduced, or become non-existant, too. Wow, the rest of the world, imagine, might become another China! So I pose a question here. "What do you think will happen to chinese products sitting on the docks ready to ship if the rest of the world's economies lose their "middle classes?" If the middle classes of those other nations decline,reduce, or, become non-excistant, who will buy the products made in china then? According to this chinese model, only the rich in those countries will buy them right? But as most of us know the rich in the midst of us are notoriously known for keeping their money in their pockets, haha. I know a few millionaires in my country where I was attending a workshop called "Rich Man, Poor Man," who asked me this question. "How do you think we got rich Teddy?" I said, "I don't know?" They then replied, "We got rich by thinking of all the ways we legally could use to keep our money in our pockets!" Let me try to make it more simple here since this is a complicated issue for the chinese. One rich man in the world they all know is "Donald Trump" (or as he is known in the west as "Sir Donald!"), on a recent television show he was asked, "Why do you buy most of the products used in your hotels from China?" His response was," because they are cheap that's why!" Sounds nice right? Now consider this Donald Trump builds an average of 3 hotels per year worldwide, so, he places orders to buy products only three times per year! Now, let us use the american middle class for example since that is the one I know the most. Presently there are 37 million americans who call or are labeled "middle-class" in the usa, of course that is expected to drop by 32% next year to 29.9 million (additionally these 8.1 million who depart from the middle class will be relegated to the poor class then). These people buy chinese products too. Can you imagine how much many more products they can order from china than Donald Trump? This is simple math, wouldn't it be more advantageous for china and the chinese to ensure that the middle class of the usa, or, for that matter, the middle classes of the other nations too, stay stable or at the present levels to keep the money flowing into chinese pockets or the chinese government's pockets? Just some food for thought!

Edited 4 time(s). Last edit at 12/26/2011 07:51AM by Tchapm3.

There is a big portion of Chinese people are very poor. This is not a separate world, people trade, nations trade too. No one can produce all the product. You can google what kind of product China imports ...

Thank you Savannah for making my point! The chinese poor will be poorer and the usa and other nations middle class will move a lot of their people down to poor also. Now, we got a big problem for all the nations of the world can't you see what this man is trying to tell you? If the other nations, including the USA, become poorer how does that benefit china, or, the poor chinese people? According to your observations the rich in all countries will become richer therefore, as this man surmises, accurately I might add, the world will become no longer independent and therefore "ripe" to the control of the rich only, not only the rich ones in china, but the rich ones worldwide in every country, do you understand more now my friend Savannah? To make it simpler, "A world dynasty or one world government as some choose to call it (includes chinese rich, usa rich, uk rich, etc.,etc.) will be created, similar to china's imperial order of long ago, where the rich keep getting richer and the poor will keep getting poorer, ok?"Isn't this also why the socialistic communist government of China rose to power, too? Wasn't one of their mandates to create "equality for all the chinese people, rich and poor?" Then in order to have "power or money" you must align yourself with a group or global aristocracy (Sir Donald is one example but since you mentioned there are more rich chinese than in all of europe, Sir Zhang haha) where they control your ideas, your philosophy, your future, your food supplies, your medical and healthcare, your schools, etc., etc.. The poor would be relegated to powerlessness as they already are slowly becoming in the usa and perhaps "other places, too?" Then they and their future children will become the servants of the ruling class (the rich aristocrazy worldwide)! So, basically, whatever the rich one world government dictates is "truth" becomes the "truth of the day" for that time period. Example here, though very graphic, but can possibly happen within the next 10 years, "the rich rulers of the world (one world government) in Germany say (could be any country so do not take offense here Savannah), "The poor in china are costing us too much money for "food production" this month? So they tell their rich chinese aristocractic brothers, "hey could you let 10,000,000 of them just die so we can get this "negative balance" off our books?lol do you see where I am going with this?" Sounds so comical right? In 10 years ask the poor people of the world (not just china, not just the usa, not just europe or africa) if they think it is funny that they are considered nothing but a "negative balance" on the bank books of the rich?

Edited 6 time(s). Last edit at 12/26/2011 07:14PM by Tchapm3.

What is your point?

If you still do not get it then the rest of china will never get it either so why waste my breath! Let me try one last time, "the point is the rich will get richer and the poor will get poorer, alright?" But I think you will not care either way until you are one of those 10,000,000 chinese (still not saying chinese just using them as an example ok) who gets terminated!

For Herzog if you are of jewish origin I think you will remember, perhaps, the phrase, "Woe unto a woman who gives birth in those days for her children will be required to have the mark of the beast written upon their foreheads and hands as a sign of their allegiance!" Did you know the technology already exists to put invisible marks on a baby's head and feet at birth? They say it is to make sure they can get an accurate count of the world's population, do you and Savannah both believe that? Do you think it can also be used to "track you" wherever you go too? More food for thought my friends! Suppose this aristocracy of the rich decide to use it for more "sinister purposes?" Will anyone be able to stop them? Think my friends think deeply if the rich decide you no longer need to exist, isn't it going to be much easier for them to find you to do the job of silencing you as they did in Hitler's times, or, send you to the pits for extermination (jews became poor as a result of german discrimination against them so it was easy to just go to the ghettoes of europe and find them put them on a train to the concentration camps) as they did the Jews? The lessons of history are there for a reason as I constantly remind you! In human history, wherever there was a rich or ruling class they usually oppressed the masses (poor) to maintain their power and their money this is historical fact not fantasy, ok? The germans used the concept of "racial superiority" to extinguish those they did not think measured up to their standards. What do you think the rich will do in all these countries once they control the cash flow and hence all that people need to survive? Yeah sure I already know one of your responses, "Well of course they will share it with the poor, if you believe that you really need to become a student of human history, ok?"

Edited 3 time(s). Last edit at 12/26/2011 07:31PM by Tchapm3.

Not necessarily the rich will get richer, your theory is wrong Google the word bankruptcy?

Why respond? Bankruptcy is only a term that allows the rich to hold on to what they have, for the poor, it is a death sentence. Prime example "Sir Donald" was on the verge of bankruptcy himself many years ago He took the "hit" still held on to millions of dollars and later "revived his empire, get it?" Another prime example is one of the millionaires I talked to at the workshop. I asked him, "How did you survive bankruptcy?" "Simple he said, I filed for bankruptcy to keep from paying "her" (he meant his ex-wife, haha)! But I had other money and properties filed in other names, therefore, how did they know what I really owned? Once again, due to youth, you have many mistaken ideas about bankruptcy, don't you? There are many "chapters" in bankrupchy court Savannah where you can reveal some of your personal finances but not all of them understand? Please read it yourself before you say things you have no knowledge of, thanks!

Here is the meaning of bankruptcy from Wikidia: Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor.

Bankruptcy is not the only legal status that an insolvent person or organisation may have, and the term bankruptcy is therefore not the same as insolvency. In some countries, including the United Kingdom, bankruptcy is limited to individuals, and other forms of insolvency proceedings, for example liquidation and administration, are applied to companies. In the United States the term bankruptcy is applied more broadly to formal insolvency proceedings.


To make it more simple for you, "insolvency" means only that you do not have the ability to pay your bills, it does not mean that you do not have assests, do you get my meaning? Insolvency applies to the term bankruptcy in the usa so again you are in error, too. A person who is insolvent files for bankruptcy to "protect" his assets, do you understand now? Assets means "money, land, properies (like houses, apartment buildings, etc.). They do that to make sure that their creditors cannot take them from them. Thus spoken, a millionaire can lose $10,000,000 dollars but still hold on to $1,000,000 in assets (money, cash flow, etc.)and as my millionaire friend reminded me, "Teddy, don't you think that if I made $10,000,000 before I also know how to make it again after I protect my assets?" So, a rich person can lose money Savannah but he will have the resources left over to make himself rich again, understand? Not so, with a poor person, get it? They have very little to begin with and if they file for bankruptcy their chances of making it to the rich class are almost impossible, get it? Additionally, millionaires have been known from time to to make "deals" with other millionaires to "hide their wealth and recover it later, too!" Ask, MJ (Michael Jordan) about it? His wife tried to take him to the cleaners so he "hid" some of his assets with his old buddy who owns the Toronto Raptors...hahaha...3 years later he was still able to buy and own his own NBA team too, understand? Here is the point, "your theory is nothing but theory (de jure)but in actual practice (de facto) it will not work that way, get it? Again, I give you the benefit of the doubt here, your youth lacks much experience and knowledge that you will need if you are to be successful in this world (no offense again) ok?

Edited 1 time(s). Last edit at 12/26/2011 10:18PM by Tchapm3.

Nothing is everlasting, rich or not. I just told you your theory is flawed. The rich becomes poor sometimes, the poor become rich sometimes too. Don't be so sure, Champ. Be humble, humble people learn.

The Chinese consumption of luxury goods is quite good for countries actually manufacturing these goods (Germany, the US, Japan, ...).
It also proved to be very helpful during the last economical crisis, without the chinese buying power some deeply troubled economies would have been far worse of.

The problem of wealth distribution within China definitely is alarming. Although it is fueled by Chinese policy and thus a mainly a Chinese problem.
It will be very interesting to see how the communist party will resolve this problem, if it is actually capable of doing so.

I totally concur with this Phil, indeed, very interesting how they will solve the problem? It is my sincere wish that they distribute the wealth positively so that more of the people of china can participate in it, however, it has been proven, historically, in the history of china that those with the money usually tighten the control over the others to insure their supremacy and the continuance of their personal family wealth! It would be nice this time to see if I am wrong for a change!

China's wealth distribution is not alarming at all. China doesn't have a middle class built yet. That's why see poor and super rich with nothing much in between. The poor and rich gap will not get closer. Just maybe a new class in between them will form called the middle class. The middle class is so valuable but yet so vulnerable to a society. It gives the poor hope to jump one class up and the rich a net to fall on so they don't fall straight to poor class. The middle class can somewhat communicate with the either the rich or poor. The rich and poor just don't get along at all. Which usually makes middle class the best candidates for management. Capable to communicate with the boss and then boss the workers effectively.

Anyways what is alarming is China's universities. Fresh grads look like they get no respect at all. But yet it is so necessary to get a degree. They spend so much time getting a degree to get a job that doesn't pay more than a taxi driver. Whats that? You think the degree gives them a chance to get promoted in the future. Sorry that is for the people that know "Its not what you know but who you know" rules. Only people that break those rules are talents.

Fresh grads getting grim futures is specially caused by the lack of middle class. See how important middle class is and China doesn't have it yet.

Right, it has been a great acomplishment to get this massive amount of people out of complete poverty, actually establishing some kind of middle class and getting away from this dramatic difference between the super rich and the working poor will be a huge challange.
Also it will be intersting to see how the government is actually going to deal with a middle class, probably thinking much more critical than poor masses.