The Middle Brow - Contemplating China's shiny new materialism

By Kylie McCaig

In trendy Causeway Bay, where the streets bustle day and night, a popular UA Cinema is not having its lease renewed because yet another Louis Vuitton store has offered to pay a higher monthly rent. HKD$20 million in fact. Or AUD$2.5 million at today's exchange rate. Per month. That's a lot of Louis Vuitton bags.  

Especially when one considers there are already several LV stores in Hong Kong for shoppers to indulge their passion for the classic LV logo products. For it must have a logo. Not for the mainland shoppers the discreet, subtle or unbranded. The bigger, louder and bolder the branding, the better.

The growing rural rich from China are driving the success of luxury labels while traditional markets such as the US and Europe flounder among economic misery and mismanagement. When "mainlanders" travel to Hong Kong, they ask their fellow newly rich neighbours, "What did you buy?", and then they buy the same thing.

China might be the great bearer of our economic hopes as Europe's woes continue indefinitely, but within the country there's signs of implosion that threaten to tip the powerful Communist machine off its axis.

Most recently, two of its left-wing leaders have parted company, with one fleeing to the safety of the US Consulate in Chengdu and the other at risk of having his newfangled "Cultural Revolution" agenda undermined by his defactor.

Meanwhile, the seemingly impenetrable state censorship machine is being hijacked by hackers and micro-bloggers intent on spreading their dissent virally and supporting government critics like artist Ai Weiwei and lawyer Chen Guangcheng.

But the creep of Capitalism poses another threat as China's growing nouveau rich find themselves aspiring to Western ideals and a new president . Individualism is anathema to communism. But China, like president-in-waiting Xi Jinping, is nothing if not full of contradictions.

As China's expansion sees the rush to purchase rural land in vast tracts, putting unheard of sums of money in the pockets of parts of China's population who previously lived on or below the poverty line, desperately reliant on the equality envisioned by Mao Tse-Tung, rural villagers who were previously part of China's poor are being swept into a world of luxury labels, international travel and Western desires.

In many Western nations, success has long been associated with adornment with luxury handbags and jewellery. Louis Vuitton, Gucci and Hermes spring to mind as top of the list in terms of desirables; Louboutin heels, the classic Chanel tweed jacket, or a Burberry trench for those grey days when raindrops threaten.

Today, China provides the largest market for luxury imported cars including Rolls Royce, Bentley, Ferrari, Maserati and Aston Martin. And the customisations of these cars cost two or three times more than the cars themselves. A fridge that opens on voice command and hands you the drink of your choice? Certainly, sir.

A recent trip to Hong Kong reveals that European luxury stores are not only thriving, but booming, driven by demand from mainland Chinese buyers. Luxury goods, in fact all manner of goods in Hong Kong, are 20 per cent cheaper than in mainland China due to Hong Kong's status as a sales tax free nation. This is one of the factors driving mainland shoppers to the formerly British colonial outpost.

The other is a little less well known. Or perhaps just not spoken about. China has long been recognised as the home of faux. Fakes, replicas, copies, however you want to phrase it, the Chinese do it and do it well. They've turned copying into an art form. They even copy Apple Stores (Apple has issued notices against 72 fake stores at last count... ironic given the company's tryst over its factory staffing).

The wine of choice of the Chinese middle class and government officials is Chateau Lafite. Chateau Lafite Rothschild, a wine estate in France, produces around 200,000 bottles annually.  However, China's annual sales of Chateau Lafite exceeds three million bottles... a lucrative business for the wily entrepreneur busy rebottling cheap Chilean wine and applying replica Chateau Lafite labels, then on-selling at genuine Chateau Lafite prices! By heading to the Special Administrative Region of Hong Kong, mainland Chinese shoppers are guaranteed the genuine article in-store. 

The lack of sophistication among China's newly monied is obvious as they step nervously into four and five-star hotel lifts, clutching each other and staring bewilderedly at the array of buttons signifiying different floors. It's not uncommon to find a family, riding up and down on the lift, no buttons pressed, not knowing how to reach the breakfast buffet or the lobby. 

And for all their desires for branded goods, they are not filling the coffers of the many Michelin starred restaurants of Hong Kong, choosing instead to eat at the equivalent of Chinese fast-food outlets, local street food and travel on Hong Kong's excellent (but extraordinarily cheap) public transport system.

How do China's capitalist leanings fit with its communist aspirations? Certainly not the way we've traditionally thought, where capitalism is the adjunct to democracy. We have always believed that capitalism requires a decentralisation of economic strength, thereby creating the environment in which democracy can flourish.

But is China showing that our traditional beliefs may not be the only way in which capitalism can bloom? Or does individualistic, 21st-century thinking have the potential to undermine the Communist Party from within?

Perhaps, in any event, we should prepare for a China Spring via Causeway Bay, spread via micro-blogging, by battening down those precious resource assets before it's too late.

Kylie McCaig (BEc, MBA Exec) has worked in media and investment banking and puts her skills to good use travelling to the world's financial capitals and reporting back her findings on everything from cost-per-wear fashion investments to Moscow's non-existent welfare system. 

With a keen sense of justice, she is a Christian who ultimately desires to make a difference.   

Girl With a Satchel


Cid said...

It is a fascinating and rather terrifying phenomenon. Thanks for a great post.

NEF said...

Food for's really interesting to see how internal changes in China might flow through and impact our perception of capitalism versus communism in real life. Great article!