Second rich generation in china - Essay Example

Second Rich Generation in China Teng Zhang Purdue Draft China is one of the fastest growing economies in the world today. The past thirty years has witnessed a great rise in the development of industries, an aspect that has promoted a rise of rich individuals in the country. The children of these rich entrepreneurs are mainly in their twenties. Thrift spending and very lavish lifestyles characterize these children, called the second rich generation. This name emanates from their fathers who were the first generation of rich people in the country.

One major character that outstands in this generation is that they are not focused on generating income. This means that they are mainly reliant on their families, which are filthy rich. Through this character, a serious economic challenge comes up, and the economic future of the country stands to be threatened if these people are consumers and are not working to expand their parents businesses. Although, some people saying “SRG” are only a very small group of people, they cannot make any huge influence.

Considering the behavior they have now and the wealth they will control in the future, I am still thinking they will make a huge negative impact to Chinese society and economy in the near future. The building of an economy required the input of all the citizens in a country. Since 1980s there were a group of hardworking people, they used their intelligence and knowledge to help China finished industrialization. Their hardworking not only made them become the first group of billionaires in China but also helped the country grown to be one of the giant economies in the world.

However, most of their children are not diligent as their parents, they have decided to sit back and eat what their parents made. Compare to business, they are seem to be more interested in the sports cars and private jets. This is a very dangerous scenario given that there is no income that is generated from this generation. I interviewed a SRG recently, although he indicated that he wants to have his own career and pay for his own life in the future. He still admitted that it is not easy to do and most of the SRG now are not thinking like him.

According to Liu (2012) Songyang Fu’s father was the owner of a still factory near Beijing. A car accident took away his father’s life in 2006 and Fu was only nineteen. Fu inherited his father’s legacy and became the thirtieth richest person in China on the Forbes’s rank. However Fu was not interested in his father’s steel business at all. He decided to use his father’s money to realize his own dream. A super sport car club was opened by him, he bought all those extremely expensive cars by his wish include a Pagani Zondar which only ten were made in the world.

In Fu’s own word, “the purpose of this club is not to make money, the money my father gave me can let me run this club for a life time. Disseminating the sport cars culture is my career.” Most SRGs in China now are infatuated with luxuries. Luxurious lifestyles are hard to maintain and are cost a lot to the economy especially when China is not the country producing all those luxuries. Because of the high price of luxuries in China, for most of the times, SRGs spend their money outside the country.

This means the huge amount of money they spend on luxuries has no help to Chinese economy at all. When this trend continues over an extended period, the economic implications are huge. However SRGs do not care what kind of inflict they would make to Chinese economy. Today, the luxury consumer group in China mainly comprises young people unlike most luxury consumers in the Europe and the US who are aged over 40 years. However, there is a very important difference between the luxury consumer group in China and the luxury consumer group in other parts of the world like the US.

While the luxury consumers in the US lavishly spend the money they have earned after a lot of hard work, luxury consumers in China are used to spending the money earned by their parents. An interesting feature of the luxury consumer group in China is that parents are happy to have their children spend their hard-earned money on luxury; “Their parents had not enjoyed life during their entrepreneurial processes, sothey spend a great deal of money on their children to remedy the regret, resulting insome pupils using the best mobile phones, best school bags and the best pens” (People’s Daily Online, 2012).

Psychology of the second-generation rich comparison is the main factor why luxury consumer group in China is getting younger and younger. In China, luxury first has become a symbol of identity and social status. Young Chinese people spend money on luxury not necessarily because they need those things, but because they want to prove their high social status and show off to others. One such person is Jiang Xin whose father owns the Yixing Xin Wei Leeshing Rare Earth Company, Ltd. Being the son of such a rich father, Jiang Xin “has collected sports cars exceeding 200 million yuan in total value, including a Pagani 760RS, which costs 41 million yuan and is one of the only five in existence; a Bugati Veyron convertible and a Pagani Zonda, both valued at 30 million yuan; a Koenigsegg valued at 26 million yuan; and many other” (Song, 2013).

Owing to the fact that the history of entrance of luxury goods in China is relatively new, the psychology of consumption of the young luxurious Chinese consumers is not consistent with the growth rate of wealth. Chinese consumers do not have rational planning and thinking. In their attempt to follow others under the influence of fashion events, commercial advertising, and medium publicity, Chinese consumers feel a strong urge for materialism. The impacts of lavish spending of the second-rich generation of China are far-reaching.

Many poor young people in China are influenced and impressed by the second-rich generation, and the poor people tend to save money to purchase luxuries. While the second-rich generation of China might enjoy spending the hard-earned money of their parents lavishly, there is need for them to understand the value and importance of money and develop a rational view of its consumption. Luxury has a negative effect on the morality of a society. One such example is provided by a rich Chinese student Xu Yichun aged 19 years who injured 4 passengers and killed the driver by bumping his brand new Mercedes Benz into a car near Seattle (Edvantage, 2013).

Luxury spending is not just a waste of money, but also causes the poor to be dissatisfied and unhappy with their lives.In conclusion, the second rich generation in China is a threat to the economic in the near future. They spend but are not keen on generating any income. Most of their expenses are on luxuries, which are not mainly based in China hence, they earn other countries foreign exchange. Their lack to generate income makes the country have a negative trend in economic development.ReferencesEdvantage.

(2013, Dec. 17). Lives of Second Generation Rich Chinese students in US unis. Retrieved from http://www.edvantage.com.sg/content/lives-second-generation-rich-chinese-students-us-unis. Liu, K. (2012). The Chinese kids who drive a super car. Retrieved from http://www.douban.com/group/topic/12920911/ People’s Daily Online. (2012, Aug. 17). Why are Chinese luxury consumers relatively young? Retrieved from http://english.peopledaily.com.cn/90778/7913841.html. Song, S. (2013, April 12). Profiling China’s Super Rich Second Generation: HAC Elite Sports Car Club.

International Business Times. Retrieved from http://www.ibtimes.com/profiling-chinas-super-rich-second-generation-hac-elite-sports-car-club-1188067.