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High thinking for simpler living
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By Lau Nai-keung
The author is a member of the Hong Kong Special Administrative Region Basic Law Committee of the National People's Congress Standing Committee.

When I read the news that there are more (US dollar) millionaires in China than in Britain, I did a Google search and found to my surprise that there are over 10 million entries under "Chinese super-rich". Private planes, expensive houses, yachts and cars, luxurious items, heavy betting in international casinos, beautiful women you name it, it has become part of the life-style of Chinese super-rich. The 364,000 Chinese super-rich and their extravagant consumption behavior do catch the attention of Westerners, especially those who want to push their luxury items in this ballooning market.

In a developing country with a per capita GDP lower than US$3,000 and the Gini's coefficient (which measures the income discrepancy in a country) standing at 0.45 high, the huge number of super-rich is not something to boast about. Although "getting rich is glorious" according to the venerable Deng Xiaoping, many of China's super-rich did not get rich the right way, leaving behind them a trail of corruption. Their conspicuous consumption is one of the major causes of social discontent, which is now fuelling sporadic unrest throughout the country.

Living in Hong Kong and formerly a businessman myself, I do not have a "soak the rich" attitude. But on the other hand, we have to address a few very fundamental questions.

First and foremost: what is economic development for? For the reward and enjoyment of a handful of super-rich, or for the improvement of the quality of life for the masses?

Let us for the moment forget about social justice, just imagine how stability and prosperity can be sustained in a society with highly differentiated distribution of income.

In a high per-capita income society like Hong Kong, the Gini's coefficient is as high as 0.53, and one in seven lives below the official poverty line. But in reality very few people live in abject poverty, and the average welfare payment per recipient is as high as 4,000 yuan ($590), with accompanying free housing and medical services.

However, on the mainland there are reportedly many who live in squalor, cannot pay for their only child's education, cannot afford to get sick, and do not have any form of social security. They literally work their shirts off to barely get by. What do you think they would feel when they watch some people publicly flaunting their living in big houses, driving flashy cars, frequenting fancy restaurants, and fussing over beautiful women? How would they react when these super-rich openly use their money to get whatever they want and bully other people? Well, these are the major causes of anger expressed in the Internet and the unrest we sometimes see in the news.

Stamping out corruption is one thing, and this should be done as soon as possible; but more fundamentally, we should go back to the basic. The objective of economic development is to improve the general welfare of all people, not just a few. All people should have a fair chance to share the fruits of economic development. Or, to quote Deng Xiaoping again, "socialism is to let people get rich together".

In fact, this is what our government is doing right now. Of the 4 trillion yuan stimulation package, quite a big chunk goes to improving people's welfare, the rural population and migrant workers in particular. This is also in line with the 11th Five-Year Plan (2006-10) and the resolution of the 17th National Congress of the Communist Party of China. As such, sharing the fruits of economic development is expected to be an ongoing policy for many years to come. The labor share of the national income will have to expand, and more government spending will be directed towards general welfare: housing, education, health, and social security in particular.

On top of all these, conspicuous consumption is to be discouraged, not for any other reason but that this is not the life style that a socialist society should promote. It is also against the general policy of a frugal society and circular economy. If these reasons are not sufficient, this life style, and for that matter, the pursuit of materialism is unsustainable. Should all Chinese lead the life-style of Americans, it will have to take several planet earths to support us. We know this is totally impossible, and if we carry on with this materialistic aspiration fuelled by conspicuous consumption, the only result is perpetual frustration.

Realistically speaking, if the income distribution is more even, at the current level of per capita GDP we can on the whole all live rather well. We do not have to buy seven pairs of shoes a year and own three cars in every house. If we design and manufacture our products in a more people-oriented way, our lighting devices could last many times longer, and our mobile phones do not have to upgrade every year. Moreover, we do not have to eat so much meat, which can only make us more obese and unhealthy. If we refuse to play catch-up-with-the-Joneses, most likely we will all live happier, and our system will be much more sustainable.

The solution is simple. It is only a matter of perception management. Stop romanticizing conspicuous consumption, restrict the advertising of luxury items, and promote the idea that simple living is cool. Let a few filthy rich consume luxury items under the scorching eyes of the general public who regard such behavior as flashy and bad taste. Very soon, only devils wear Prada. On top of that, heavy taxation imposed on luxury items will of course help.

(China Daily August 4, 2009)

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