by Toffler

Toffler

Toffler

Saving versus Consuming?

January 13, 2007, by TofflerN, category Uncategorized

While back in the states, I went to Target to stock up on cold medicines and specialty toiletries.  While there, I browsed through the sporting goods section and lamented that they didn’t have such quality, affordable home fitness products readily available in China.  Sporting goods, aside from tennis racquets, are a bit hard to find and overpriced in Shanghai, so I wished I could have Target’s selection conveniently located in Shanghai.

Then later, as a walked past the consumer electronics section I struck by the mass of products and sheer variety of items for sale.  I was instantaneously reminded of American’s consumerism.  I was a bit perturbed and embarrassed that we, as Americans, and particularly young Americans, had relinquished long-term visions for immediate gratification to purchase the latest electronic or fad item instead of saving money.  Furthermore, I was disappointed that the very successful advertising industry, in conspiracy with product developers, had convinced Americans that they needed to upgrade their electronics constantly to ‘keep with the Joneses.’  (Case and point to America’s consuming nature: when walked by a Starbucks in the US, I thought ‘that’s the largest coffee cup I’ve ever seen.’ But then I remembered I was back in the US and that’s the norm. I had adjusted to Chinese sizes.)  Because of these factors, America has one of the lowest savings rates in the world; a fact it will undoubtedly pay for not far in the future.

China, on the other hand, has one of the highest rates of personal saving.  However, with having already the world’s second largest, but fastest growing, advertising industry, I suspect this is likely to change.  For the past few years, cell phones have been the hot item that consumers spend money on, and basically the only item that demands upgrading.  But with more consumers becoming Internet users and car drivers, perhaps computers or cars are the next product the Chinese will seek to constantly upgrade.  Though the foundation of the savings culture is not likely to change quickly, I believe Chinese consumers will be increasingly affected by advertising.  Even if China never becomes a consumerist society on par with America, the massive population would undoubtedly propel it beyond the US as the largest consuming nation in the world.

Is having a nation that consumes more that the US a good thing or a bad thing?  Well, the short-term business perspective would certainly indicate that businesses and investors would be happy as they reap the profits from a consuming China.  However, a longer-term environmental perspective (particularly that espoused by Thomas Friedman in “The World is Flat”) indicates that planet earth cannot support China consuming on a level equivalent to that of the U.S.  As they say in China, 怎么办? (what can be done?)

Does the advertising industry in China need to take a more responsible approach to promoting consumerism than it has in the US?  Or is the saving nature so fundamentally rooted in Chinese culture that advertising won’t be as effective at driving consumerism as it has been in the US?  (Doubtful, China is already the world’s second or third largest market for luxury goods) Should the government change its policy of promoting consumer spending?  Should the US government create plans and policies to encourage Americans to cut back on their spending and emulate China in savings?  Perhaps the US government can use the very successful advertising industry to advertise to Americans the benefits and long-term rewards of saving.

2 Comments

  1. midi |

    hey toffler, I have been reading your blog for months. As a Chinese I enjoyed the observing of China with someone from a different culture 🙂

    About the saving haibit. Maybe it’s a rooted nature. Maybe. While I’d like to say, Chinese are saving nowadays mainly for the expected and unexpected expenses. The society guarantee system is not matured enough to assure Chinese to spend the majority of our money and to lie our future on it. Americans I guess neednot worry too much about that.
    ^^

So, what do you think ?