The ostentatious display of wealth in China, from driving Ferraris to carrying Hermes bags, is upsetting communist rulers. So government officials are contemplating ways to spread the wealth and get the rich to tone it down,
The Washington Post reported.
Paradoxically, Beijing’s leaders also see luxury items as a good source of revenue and are considering cutting tariffs on such items to stop citizens from buying them abroad or in Hong Kong.
“The government is facing a conflict,” Michael Ouyang, representative of the World Luxury Association in China, told the Post. “They don’t want to promote luxury because they are worried people who cannot afford it will see the advertisements. But they don’t want to limit luxury products because it’s good for the economy. So they’re facing a dilemma.”
With the economies of Europe and the United States struggling, China has become a top market for luxury goods. Chinese bought $12 billion in luxury goods in the past year and will account for 20 percent of all worldwide luxury sales by 2015, the Post reported.
Bentley sold more cars in China this year than in the United Kingdom, and Mercedes-Benz recently opened a new design studio in Beijing.
“Showing off wealth shows that China’s economic development has not been long, and Chinese society’s psychology of consumption is still not mature,” Hu Xingdou, an economics professor at the Beijing Institute of Technology, told the Post. “In China, wealth is the only criteria to measure social status. People hope to show they have a higher social status by wearing luxurious brands.”
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