I recently has a very interesting talk with a Chinese college student. She exemplifies the new up & coming middle-class Chinese consumer that so many international businesses are pinning their hopes on. She is a grad student majoring in teaching Chinese – but her goal is to work in a Chinese public school and not an international corporation.

Her priorities in life:

She is worried about finding a good job after she graduates - with the government.
She is not considering working for an international company – they are too demanding, unstable, and don’t pay well.
She is consuming more – on make-up, clothes & travel
She is saving less – charging more (and no – she is not paying off her full balance each month)
Her aspirations include foreign travel and a cute BMW.

Back to the New Basics
Gregg Bissky got to heart of an important trend in a recent post on www.ChineseSuccessStories.com when he wrote:

‘Has China changed? Companies bet millions on the answer, but it’s the wrong question. You should ask if Chinese have changed. China has changed; the Chinese haven’t.”

In the 60s the aspiration of the average Chinese consumer was a bicycle, a sewing machine and a wristwatch. Now it’s a credit card, a convertible and international travel. The Chinese haven’t really changed – it’s just their spending habits and aspirations that have adjusted to their hard-won prosperity.

I’m still hearing about the mythical upwardly Chinese with no knowledge of brands and a high savings rate. International businesses are still operating under the assumption that an army of unsophisticated Chinese wage-earnings don’t know how to spend their piles of cash. I think that there was a 2 month period back in 2002 when about 30 Chinese with good jobs didn’t know quite as much about major brands as young Americans or Europeans did. For most of my time in China, I’ve found the under-40 Chinese to be not only knowledgeable about brands – but highly sophisticated and opinionated. They are already spending - and have their own notions of value.

Will Chinese spend the world out of the recession – and put your China-based company back n the black? Maybe the rural population still has room to consume more and save less, but the young urban types are already spending to the max – and running up credit card balances. They aren’t choosing between spending and saving – their choices are between which products or services they will spend on.

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