Over the last few decades, China has seen one of the highest rates of growth in the world that has catapulted it to the position of the world’s largest economy in terms of PPP GDP. This exponential growth, driven mainly by the secondary sector has created quite a few billionaires in modern day China and increased the income disparity significantly.
To make matters worse the prodigal sons and daughters of these billionaires are now grabbing eyeballs by their ostentatious displays of wealth. Flashy cars, burning notes and gambling are just some of the vices that the newly rich fuerdai have begun to flaunt. The infamous picture of a pet dog of one of these kids wearing two apple gold watches made the rounds on Instagram lately, with people comparing these kids to the likes of Paris Hilton. The problem however, is much deeper than just a few kids showing off their wealth. As the global economy slows down, China will have to work twice as hard to sustain their growth. A saturation in the manufacturing sector will also need a refocus towards the services industry. And it is this very generation of people who will have to build this China. The fear is that a generation that has only been taught how to expend wealth not create it will not be able to take over the reigns from perhaps one of the most entrepreneurial generations in China, leading to a massive slowdown.
China may be wise to learn from Japan and the Asian tigers which followed the Japanese pattern of growth to reach where they are today, or it may soon fall into a pit of no return, much like some of the European economies. Discipline and focus are tough to maintain once a certain level of wealth and power is reached, but if China wants to maintain its position in a competitive world market, it fuerdai will have to step up and take responsibility of their nation’s future.
Topic courtesy: Juan