Only when every day is “Golden Week” can China become a truly wealthy nation

On October 13 the 2015 Global Wealth Report released by Credit Suisse Research Institute revealed that the Chinese middle class now counts 109 million adults, well ahead of the 92 million adults part of the American middle class, meaning the Chinese middle class is now, for the first time, the world's largest; meanwhile the total amount of wealth in China surpassed that of Japan to become the world’s No.2, only next to the US.

The data were soon being widely picked up by the Chinese press and consequently discussed by academics, media, and financial experts, among which one asked, and argued: how come China becomes world’s No.2 richest country overnight, as the data seemed to suggest?

Time after time, such research findings keep reminding people how “wealthy” and developed today’s China can be, and they consequently add to the common understanding on China’s foreign relations as well as domestic growth strategy. However, on the other hand, such findings seem to run so much counter to the almost overwhelming “gloomy” outlook of an economic slow down in this country.

Trying to explain such a conundrum, I thought about the recent annual “Golden Week” in China, i.e., the 7-day National Day break. Forgetting about the rationality of the disputable nation-wide “out-of-office” arrangement left over by the planned economy era, the people’s behavior during that period portraits a huge contrast in the Chinese economy.

A very rough statistics suggested that during this latest “Golden Week”, about 700 million Chinese people were on the move. In the city of Beijing alone, according to the Beijing Tourism Commission, the capital city received a total of 11.5 million tourists with a total consumption volume of RMB8.3 billion worth (about US$1.3 billion) in seven days.

While many people are enthusiastically talking about the vast business potential for such occasions, I feel very concerned about the fact that for millions of Chinese, life in a Golden Week means something that they can only have perhaps once or twice a year.

In a neighboring city like Hong Kong, for example where its middle class have been complaining about the increasing "hardships" caused by high prices, people would casually meet in a five-star hotel for afternoon tea or travel to Japan for a long weekend. However in China, for millions, star hotels may be something just for once in a life time, perhaps at wedding, not even for a Golden Week trip.

The Credit Suisse report also mentioned that in 2000, the size of Chinese wealth was similar to that of the US back in 1939; 15 years later, Chinese wealth stood at the level the US had reached in 1972 (33 years later) and the wealth of the country's households could well continue to leapfrog the growth rates of developed economies. As a result, the number of Chinese dollar millionaires is expected to reach 2.3 million by 2020.

I could not argue with that fact. But in reality, when talking about the Chinese economic growth with my clients or colleagues, I often give another “real life version”:

When I started my career in a very decent government background job in 1990s, I never earned a monthly salary of over several hundred RMB (lower than US$100). Every time when I wanted to take a taxi (that cost just 10-20 RMB, or about 2 US dollars), I needed to think hard whether it can be justified. Every time I was looking for a quick lunch that would vary from RMB10 lunch boxes to RMB50 big meal in a local restaurant, I oftentimes went for the former. And, I noticed that a construction worker who happened to stand beside me had the very similar considerations, and made the same decisions.

Fifteen to twenty years later today, I no longer give a thought when I hop on a taxi. I would grab a lunch box I like for a quick bite. I would prefer staying with my family in a quiet and comfortable place for some intimate time during a Golden Week, because we normally got our long distance travels planned a few months ahead.

However, both in my subconsciousness and in my immediate reality, I know that that worker from the construction site opposite my window is still struggling with his lunch box as his hard-earned 2,000 RMB monthly salary can not afford him a free choice of lunch box of much better than what we could get in the 1990s. And I know that he may never ride a taxi in a year. And I am sure he may never have traveled, or plan to travel to anywhere besides where he works now and his own hometown, even during the Golden Week.

And I am very sure that that worker won’t care about any figure about China’s wealth, or if China is slowing down.

Looking back at the sophisticated research findings, and the attendant hot debates, either about China’s fast expansion globally or on the other extreme the repeatedly said “slowing down”, there is one thing to be meaningful: only when such figures matter to ordinary Chinese, not just the economists, traders and statesmen abroad (who tend to be mis-guided to inaccurate perceptions or conclusions), that they would become truly meaningful.

And behind those figures, it is only when ordinary Chinese live an everyday life like in the Golden Week, can China really turn into a wealthy country in reality.