“Chinese be Shoppin’”
“http://www.economist.com/printedition/PrinterFriendly.cfm?Story_ID=2771531”, an article from The Economist Newspaper and The Economist Group, http://www.economist.com/printedition/PrinterFriendly.cfm?Story_ID=2771531
is an interesting article about the Chinese people’s love for shopping. The amount of Chinese people spending their time shopping continues to grow. According to Tyler Cowen, a Marginal Revolution writer, Chinese mainlanders spent more money per person shopping this last holiday in Hong Kong than all tourists combined. The purchasing of luxury items by Chinese people is also on the rise.
In microeconomics we learned that as an individual’s income increases, their purchasing of luxury items increases whereas their purchasing of inferior goods decreases. Since Chinese people are purchasing more luxury items, is it reasonable to assume that income in China is increasing?
I am inclined to believe that the Chinese people are not necessarily becoming more affluent. Alternatively, they are spending less and less money in other arenas of their lives in order to afford luxury items. This point is demonstrated by a statement by Christopher Zanardi-Landi, a luxury-firm general manager in China for Louis Vuitton. "The Chinese go to Paris, stay at two- star hotels, eat cheap Chinese food and spend all their time shopping,” This statement shows that some Chinese give up eating spendy food and staying in higher priced accommodations in order to afford luxury items.