Thornhill Capital LLC - consulting, financial, accounting, compliance, due diligence, risk management, translation and other services, B2B, USA, China.

Published on Oct 29, 2013 in Asia, China, Featured Articles, News

Keeping up with the Wang’s

In the United States we use the term keeping up with the Joneses as an idiom for comparing one neighbor’s accumulation of material goods to another. In China we might use the term keeping up with the Wang’s as the social equivalent. In both countries, failure to keep up with the material possessions of one’s neighbors is often perceived as a socio-economic or cultural inferiority.

Photo from

Photo from

With a growing middle class, and an increasing number of affluent and super-rich, many Chinese now link their social status to material possessions. Social status and face are extremely important in this country of 1.3 billion people, as there’s constant competition between people attempting to climb the social ladder from obscurity to notability. On the face of it, that seems odd as China is a communist country where there’s meant to be social equality. But China is only communist as far as politics is concerned. Otherwise, China is every bit as capitalist as the United States. Moreover, China’s culture is changing. Material possessions, once de-emphasized in pre-1978 isolationist China, is increasingly becoming the delineator between social classes. The government is actively encouraging capitalist enterprises, and the accumulation of individual wealth, as a way of perpetuating the country’s growth. As this occurs, so do the displays of the trappings of that wealth.

According to the Worldwatch Institute, China is now the world’s largest buyer of luxury goods, accounting for 12 percent of global demand. Goldman Sachs reports that the purchase of high-end luxury goods by Chinese consumers is expected to grow 25 percent annually for the next four years. In addition, only 2 percent of China’s global purchase of luxury goods is from domestic sources, with 10 percent coming from Chinese tourists traveling abroad.

One reason for this rise in materials possessions is that Chinese people are no longer struggling just to survive, as they did from the 1940s through the mid-1970s. Since that time the nation has experienced more than three decades of double digit growth and a huge migration of rural Chinese to higher paying urban jobs. This prosperity has increased individual wealth to where China is now embracing the lifestyles and buying habits of wealthier nations. Chinese people travel more, are better informed due to the pervasiveness of the Internet, and are more socially conscious than past generations.

As the Wang’s continue to compete with each other for material possessions and social status, competition is expected to intensify. Since China’s consumer class currently represents only 19 percent of the country’s population, compared with 95 percent in Japan and 89 percent in Europe, China’s consumer class is expected to significantly increase in the coming decades, causing even more competition between the Wang’s.

Alan Refkin

If you are currently not receiving our newsletters or blogs and would like to, please sign up at, or visit our web site at, which will also give you access to past editions of our blog’s and newsletters. We would also be pleased to answer any questions you may have by contacting us at