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Chinese Millionaires!?
Used to be a distinct oxymoron under the old Communist regimes and grist for jokes by Leno and Letterman but no more. Chinese Millionaires are growing by leaps and bounds in the new capitalist economic system and this is causing a major rift and jealousy among the have-nots. Here is a report that appeared yesterday in the Indo-Asian News Service about this new trend in Chinese society. Should be noted that many diamond and manufacturers have built state of the art factories on the Chinese mainland in order to take advantage of the highly motivated and intelligent labor force and cheap working wages.
We recently blogged about China becoming an emerging economic power with our focus on the diamond and jewelry industry. Read it here: China Rising!
Anytime there is a seismic shift in economic matters, there are growing pangs and adjustements. Here is the Indo-China News Service report.
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Mr. Lai is on the horns of a dilemma as he stands amid what may be the most dazzling collection of luxury goods gathered under one roof in modern China. Should he listen to his wife and buy the $750,000 Rolls Royce Phantom or should he listen to his instincts and stick to his modest Mercedes Benz?
"It's not the money I'm worried about," says the 43-year-old head of a major textile company. "It's just that if I drive a car like that, we'll need a bodyguard too. When they see you inside a Rolls Royce, some people hate you and you need protection."
Next to him, in an exhibition hall filled with diamonds, sports cars, boats and diamond-studded mobile phones at China's first major luxury goods exhibition, Lai's 28-year-old wife is gently caressing the wing mirror of the gleaming maroon Phantom. It looks as if she will get her way.
In nearby Shenzhen, where a parallel exhibition is being staged, Xhang Ming is in a black mood after having spent two days watching the wealthy browse among Bentleys and jewellery that he could not afford in a lifetime's labor.
"I hate these people," says the 28-year-old security guard, paid $4 a day to patrol with dozens of other uniformed guards for the three-day event. "Everyone knows that none of them get their money honestly."
He gestures towards a circular Hastens bed from Sweden at the center of the hall with a price tag of $49,000. "It's disgusting," he sneers. "In my hometown in Hunan province, you can buy three apartments for that money. How could anyone spend so much on something like that?"
In today's China, the answer to his question is "very easily." There are legions of nouveau rich in the world's fastest growing economy who can afford to do much more than spend the price of three rural homes on a single bed.
This is the brash new China, where more than 20 years after former leader Deng Xiaoping announced that to be rich was glorious, thousands of people are gloriously rich - and they want the freedom to flaunt their wealth in public.
Millionaires from across the nation in December descended on the southern cities of Shenzhen and Guangdong for the two fairs aimed at showing them ways of spending their newfound fortunes and taking some of the stigma out of being filthy rich in China.
Wealthy guests - personally invited from the 27,000 people in China now worth $6 million or more - spent $12 million in Shenzhen alone in two days, and donated hundreds of thousands more at charity auctions held to raise money for orphaned children.
Most of China's super-rich are young - in their 30s and their 40s - and driven by a desire for opulence. At the same time, however, they are fearful of the reactions to their extravagance.
Most of China's 1.3 billion people still scrape by on no more than a few hundred dollars a year while a small elite are yuan billionaires worth a minimum of $13 million - and more than 90 percent of them are the children of senior Communist party officials.
Not everyone is wary of being ostentatious. Li Cai, the ebullient 37-year-old head of the Guangzhou Yulong Tenggao Electronics Company, who took one look at a light aircraft as he toured the Guangzhou fair with his partner then signed up for a $50,000 membership in a private flying club, exclaiming with a broad grin: "It's so cheap.
"I would like to buy a boat while I'm here too if I can find one."
The twin cities of southern China were chosen for the luxury goods' exhibitions because they have a more liberal attitude to wealth than Beijing, 2,000 km to the north, and also because Guangdong is the nation's richest province.
Some observers see the widening rich-poor divide in China as a powder keg that could ultimately bring down the ruling Communist party. There have already been widespread anti-corruption riots in rural areas as anger mounts over the gulf in earnings which has seen the difference between urban and rural incomes increase 16-fold since 1990.
"Luxury is still a dirty word for many people," said exhibition organiser Liu Jidong. "There is still a big gap between the rich and the poor in our country but maybe if people learn more about these luxury products, they will begin to believe that if they work hard, they too can enjoy these better things in life. This kind of event might encourage them."
The highlight of the Shenzhen fair was a $400-a-head televised dinner and millionaires' auction for 800 invited guests, to raise money for underprivileged children.
"The idea of the auction is to show that rich people really care," said Liu. "If they do things like this more often, maybe the poor people will not envy them."
Outside the auction venue, migrant worker Wang Guihua, 35, laughed bitterly when told of Liu's remarks.
"Doesn't he understand we belong to different worlds?" she asked.
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