Are Consumers the New Patriots?: Concern Over China’s Economic Transformation

By Yi Gao

Since the Financial Crisis in 2009, many governors advocate it is time to transform China’s economy from export-led growth to domestic-consumption growth. In response, a joke has emerged among Chinese citizens: if you go shopping, you are a genuine patriot. Sometimes when I buy unnecessary things lavishly, I proudly tell myself I am a true patriot.

Now, the good news for concerned governors comes: China National Bureau of Statistics (2012) shows that in the first three quarters of 2012, consumption accounted for 55% of growth, while investment contributed 50.5%. And Simon Rabinovitch from the Financial Times immediately pointed out that increasing consumption is good for China and they should keep it on.

However, is this really the right track for China?

Undeniably, China has suffered from the wrong kind of growth, developing a dangerous reliance on investment, which makes the country vulnerable. But if China switches to economic dependence on consumption, this will also be a huge problem.

First, more consumption means more pollution. Plastic bags, an indicator of consumption are a good example. If Chinese people consume more, they will need more plastic bags. Meanwhile, plastic bags are hard to dispose of and toxic. In his book, When a Billion Chinese Jump, Jonathan Watts explores how plastic bags are a huge problem for people in Guangdong, China: “Though their village was five thousands miles away from the nearest UK High Street, they could see, feel, and smell the consequences of globalized consumer culture.” However, plastic bags are only one among the multiple pollution sources from consumption. More hazardous things like batteries, chemical dyes, e-waste and fertilizer are contaminating the environment. They are all killing our earth, and making people sick.

Second, more consumption means less resources. Obviously, we only have one earth, but we have so many desires. Our desires for novelty will rapidly burning out the limited resources the earth can provide. Jonathan Watts suggests that if everybody behaves like an average American , we would need 4.5 earths. In addition, China,with 1.3 billion people, will be the biggest contributor to environment problems. If China wants to live lavish high-consumption life style, the doomsday is no longer a distant nightmare. The earth we are living on is a homeland we share with future generations. I am sure nobody would want to see their grandchildren live as a primitive man.

Third, more consumption means less recovery from the crisis. Though consumption is a great boost to the economy, the Chinese government advocates domestic consumption, which merely boosts the domestic economy but not globally. Chinese people are rather selfish if they only want to save themselves, and myopic because the domestic economy is connected with the global economy. The Chinese economy definitely cannot survive if all its allies are dead. During the global financial crisis, fighting alone is not a wise choice.

Economic transformation is a popular word since the financial crisis emerged and the Chinese are on their way to achieving it by making the economy consumption-led. Export-led growth will lead to seeming prosperity built by a financial bubble. However, China is now on its way to another mistake: while deviating from export-led growth, new problems will arise from the other extreme of relying a domestic consumption.

I think China’s economy is so far so good since it indeed transformed positively from the previous model. China should try to find the equilibrium point to achieve a balance between environmental pollution and economic development. When I go shopping, I will not say I am a patriot anymore, because if I keep buying like that, I will be a criminal murdering the earth.

Yi Gao is a first-year student from Cornell University majoring in economics. She is interested in environment issues, China’s development, and consumer culture.