While Americans are looking ahead five weeks to our next three day weekend, The Chinese are getting ready for their Labor Day Celebration. Only it's not a day , or even a three -day weekend. It's an entire week-- one of three Golden Weeks celebrated throughout China. Oh, and no one gets paid for their time off.
This is the 20th Golden Week. The idea is not so much to give people time off from work but rather to get them time off so they will spend money. It seems that while China's economy and middle class are red hot, the mental mindset of the Chinese is more frugal than the economy needs it to be.
From the China Daily,
A government official said that despite the huge flow of people during the Golden Weeks and the problems that causes, the holiday system would remain for at least the next few years, because "there is still a lot of potential to be explored". Wang Kecheng of the National Bureau of Statistics, said: "The system has contributed a lot to boosting domestic consumption and demand, which makes its existence necessary."
He was speaking at a press conference attended by officials from 18 government departments. Official statistics have shown that the past 19 Golden Weeks have contributed 670 billion yuan ($86.7 billion) to the economy. Zhang Xiqin, deputy director of the National Tourism Administration, said: "With per capita Gross Domestic Product (GDP) estimated to keep growing, there is a huge potential for tourism development during the Golden Week holidays." He said that developing tourism and expanding domestic consumption and demand was good for the economy and the trade surplus, unlike investment, "which is already overheated".
What are the Chinese spending their money on? According to Helen Wang at Across the Pacific color tvs computers and diamond engagement rings.
Although China has 1.3 billion people, only 400 million are in urban areas. Coming from a culture that is extremely frugal, the middle class Chinese are both savers and spenders. There are people who are looking for value and a bargain price, and there are others who are seeking a premium branded product.
Some of the most popular products among the middle class are color televisions, mobile phones and personal computers. Interestingly enough, in big cities like Shanghai, diamond engagement rings are big sellers, even though the concept of Western-style engagement prior to marriage does not exist in China.
Want to learn more about the Chinese consumer? The Harvard Business Review in brief offers a great insight into Chinese workers and consumers.