Even With All The Money In The World, China’s Economy Is Still A Bust

Even though half of the world’s luxury brand revenue comes from the Chinese, the country’s economic growth is at an all-time low.

China’s outbound tourists, who were the largest tourism group in the world last year at 120 million, have spent almost 1.2 trillion yuans (USD 183 billion) on shopping sprees abroad. $91 billion out of a total of $116.8 billion went to more than 20,000 different luxury brands overseas, making China accountable for over 46 percent of the world’s luxury sales.

One of the main reasons the Chinese prefer to shop overseas is the price difference; products like premium watches and alcohol can have a price gap of as much as 80 percent while fashion products can sell with a 30 percent price reduction.

One would think the ability to buy more might have contributed to a better economy in China, but that’s not the case. China experienced 6.9 percent growth in 2015, the slowest annual expansion in a quarter century. While the small percentage of rich Chinese gain more consumption power, the poor are getting poorer.

With an estimated 2.4 million millionaire households in China, according to a report, the People’s Republic has more millionaires than any country apart from the United States. But the millionaires only represent 0.17 percent of China’s almost 1.36 billion population.

Although the minimum wage in the Asian country has increased, the pay-gap has widened so much so that the top most earners pull in nearly half of the country’s total income, while the big majority of bottom most earners rake in only a mean 5 percent.

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Unfortunately, it doesn’t seem like the situation is going to improve anytime soon as Chinese college graduates faced a tough job-hunting season in 2015. College graduates reached a record high of 7.49 million last year, but because of the declining economic conditions, companies decreased hiring new recruits.

Meanwhile, the situation is further exacerbated by mega-corporations that do everything in their power to exploit the nation’s children for paltry cash. Companies like Apple Inc., for instance, fail to provide their minor student workers with basic human rights. Forced overtime continues to be imposed on factory workers who put in as many as 14 hours a day at times, but only get one or two days off for three months at a stretch.

Moreover, many workers are treated like slaves and compelled to do unpaid work by having their mealtimes cut short while many others are required to come to work even before the official hours began.

In 2014, China surpassed the income-gap of the U.S., thus widening the gap between the privileged and the poor at a time when the economic growth is at an all-time low, which could be disastrous to the nation.

Banner / Thumbnail : Reuters

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