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Bachelor of Art (Hons) Business Management Critical Consumption-China Affluenza Symptoms Detected in Chinese Society

Student: Shiilgee

2012

Table of Contents
Research Methodology .................................................................................................... 4 Literature Review of Affluenza ..................................................................................... 5 Research Outcome ......................................................................................................... 7 Conclusion .....................................................................................................................11 Reference: ......................................................................................................................12

Introduction Analyses of environmental change, affluenza, demographic shift and consumption in China should begin with an understanding of official Chinese economic policy. In a 2006 speech delivered to the National Peoples Congress, Chinese Premiere Wen Jiabao advanced a state policy of deepening economic restructuring and opening China to the outside world (Wen 2006). Wen emphasized that a key part of this economic restructuring has been accomplished by encouraging consumer spending as a source of economic growth. Over the last three decades, China has had the fastest growing economy in the world. Income levels have concomitantly increased rapidly, creating a young, urban population that is eager to consume (Li 2009). Encouraged by a government keen on promoting economic development through consumer spending, private consumption levels among the urban elite have skyrocketed. The Chinese governments policy of economic development through consumer spending mirrors a global trend in which the creation of consumption driven modes of capital accumulation has become a favored complement to the traditional production-based approach. The state has turned to consumption as a central component in legitimizing capitalist development and neoliberal globalization (Sklair 2002) that is framed in a culture-ideology of consumerism, encouraging the constant escalation of consumer spending (Sklair 1994). China provides a crucial case (Gerring 2007) for such study because of the magnitude of potential environmental impacts of such large-scale acquisition and disposal. Consumption levels grow with prosperity, a pattern that can be seen from the core countries to the periphery as globalization and free trade selectively enrich certain segments of the worlds population. High incomes are associated with both a better standard of living and higher rates of consumption, which affects energy and resource use, as higher consumption lifestyles are associated with both greater use of natural resources and greater use of energy to produce materials (Dhakal 2004). Economic expansion in China means not just a higher standard of living for the countrys population, the introduction of millions of new, high-volume consumers contributing to resource depletion and greenhouse gas emissions. Problematizing consumption as such, rather than just production, shifts away from a traditional focus on the producer (Princen 2002) and highlights the role of acquisition in resource use (Carolan 2004). In this sense, while production, regulation and use are of importance, the impact of getting and discarding must be considered a crucial site of inquiry in itself. In this paper, I forward approach to better understand the ecological impacts of emerging high-volume consumerism in China. I reviewed affluenza and specifically reviewed also in China and create a basic consumption of consumer profile. I explore some of the demographic shift, population size implications of emerging Chinese consumer patterns.

Research Methodology The research methods like comparative content analysis to holistically understand the problems. I analyzed some articles from University of Teesside Library and National Library in Singapore, newspaper, websites collect information to related to the topic. The research methods to understand the significance of affluenza for critical consumption in China.

Literature Review of Affluenza I have broadly tried to understand the concept of affluenza by analyzing and defining some key of concepts related to the thesis. Particularly. I have reviewed the role of affluenza. Everyone seems to have a superficial idea about what affluenza is and does. However holistically understand it let us start with some definitions. Affluenza is presented. It is a back slang which refers to feelings of unhappiness, stress, and guilt induced by the pursuit and possession of wealth (Business & Management Dictionary 2007, p258-258). Affluenza is a recently invented term, a combination of affluence and influenza designed to highlight excess craving for material possessions as a disease or disorder. DeGraaf, Wann, and Naylor (2001) describe it as a rapidly expanding disease of the mind, a painful, contagious socially-transmitted condition of overload, debt, anxiety, and waste resulting from the dogged pursuit of more. Contemporary affluenza researchers contend that if we do not begin to reject our cultures incessant demands to work harder, spend more, and buy more, our society will begin to pay later with significant effects thrust upon our offspring (Koplewicz & Williams, 2006, p. 1). People are less likely to be materialistic and have to virus goal or motivations and more likely to be preoccupied with things spiritual. (Oliver James p, 20). Young people are showed very clearly. Those with materialistic values, such as wanting money or prestige, are far less like to be religious and they are unhappier. It impedes the meeting of four fundamental human needs. Feeling secure, been part of community, feeling competent, and being autonomous and authentic. (P, 23). Why impairs the meeting of each needs. Insecurity constantly comparing you and lot with others, especially those who have more than you is not a prescription for feeling safe. If you are constantly worrying whether you have enough money and the right possessions or about your appearance, or seeking fame, you are digging the proverbial bottomless pit. (Oliver James p, 23) affluenza is so adept at confecting and making profits from providing. Alienation prevents you from meeting your need to connect with family, friends and the wider community by relegating them to a low priority. Unless your family members assist your career, you keep them at a distance. In choosing friends, you are motivated by their use to you, not a desire to be close, emotionally, and to enjoy shared pursuits for fun rather than competition. (Oliver James p, 24). People compensate with substance abuse and aholias, ta make you feel better and inject some thrills into the dreariness. Feeling incompetent the same features of the breed insecurity also impair your need to feel competent. However conventionally successful you are, it is never enough. (Oliver James p, 25). There is long list of hugely successful who had a nervous breakdown at this point. Inauthenticity and feeling like youve been hypnotized the impedes our need to feel authentic and autonomous by creating a thin, tough, impermeable barrier of false wants between us and our true desires. (Oliver James p, 26). Being bough or sold you

being to experience yourself not as a person as a power less entity whose value is wholly determined by the market something that is unlimited beyond your control. According Thomas H. Naylor to Affluenza has been really helpful in reminding to what's important in my life-it's not the stuff. It's my life that I value. Do we have a good thing going, or a good thing going bad? The fact is, beating affluenza is not about 'giving up' the good life, getting it back (Thomas H. Naylor, 2005) Affluenza When Too Much is Never Enough by (Clive Hamilton). According to the book, society is addicted to overconsumption and this situation is unique in human history. Hamilton argue that people aspire to the lifestyles of the rich and famous at the cost of family, friends and personal fulfillment and that rates of stress, depression and obesity are high as people try to cope with the emptiness and disappointments of consumer life. (Clive Hamilton, 2005) People lost the way as a nation and as a society. People become a nation of people who only want the best of the best at any cost and must affluented countries in the world is following to these 7 countries New Zealand, Australia, Singapore, Shanghai, Moscow, Copenhagen and New York. Explore the way in which what the called affluenza has panned out around the globe. (Oliver James) How does affluenza affect to China society? Here comes the problem of living expenses gap across the globe. Although generally speaking Chinese has lower living expenses, the rocketing real estate price has cost the life in big cities (Beijing, Shanghai, Shenzhen, Guangzhou etc.) much higher than before. In particular, as to affluent class, who want to enjoy high quality life by global standard, which means relatively luxury life, it really doesnt matter a lot if they live in Beijing or New York. Cost of Living Survey done by Mercer Human Resources Consulting clearly demonstrated this standpoint, by ranking Beijing as the highest living cost city and Shanghai as one of the in 2009 all over the world (Fei Wang) According to National Private Enterprises Sampling Survey Chinese affluenza is consists of two groups, professional executives and private owners, there are about 14.4% private owners professional executives with over US$125k (RMB1m) annual income, meaning almost 1.5m professional executives. So we could conjecture that there are over 2m private owners professional executives belonging to affluent class. In contrast, the percentage of professional executives in total affluenza class is no more than 1/3.

Research Outcome These consumer profiles suggest that a consumption pattern is emerging in China that currently resembles the European type of moderated consumption, is backed by an ideology of consumption and development similar to that of the U.S. a long period of material expansion after the Depression encouraged younger cohorts to adopt a lifestyle of high consumer spending, reflecting the economistic logic of positional consumption as keeping up with the Joneses. A proclivity to spend without regard to material limits is reflected in the consumer profile of high consumption levels across spending categories. Living in ever-larger houses, high rates of car ownership and large-scale consumption of consumer durables reflect an economistic perspective on consumption as status guarantor and driver of the economy. Suburbanization, in addition, enabled and encouraged the use of resource-demanding products such as larger living spaces and cars as a primary source of transportation. The recent, dramatic material expansion in China has been coupled with a move to the cities among younger cohorts and away from the spending influences of older generations. Such separation from older cohorts who experienced economic deprivation during the Cultural Revolution contributes to the creation of a young, urban consumer culture. Conspicuous consumption and a leisure-based consumerist culture are emerging among wealthy Chinese consumers Prestige Buying is becoming popular among Chinas growing young, urban and salaried workers (Pocha 2006). Affluenza affects people across all age groups and socio-economic and cultural backgrounds. While no one would want to deny people of a higher standard of living, with a human population of 1.33 billion and rising. Chinas increasing wealth, urbanization and life expectancy. As societies become richer and more urban, fertility rates almost always drop. Rising wealth and standard of living translates into higher life spans. They are exposed to an average of 40,000 commercials a year, and control and influence 60 percent of their parents' consumption choices. They decide 300 billion USD of consumption worldwide per annum and influence the consumption choices worth over 1 trillion USD. (By People's Daily Online). One number best characterizes Chinas demographics today 160 million. The country has more than 160 million internal migrants who, in the process of seeking better lives, have supplied abundant labor for the nations booming economy. Pointed out that their most prominent characteristic is they think they are adult consumers and other hands it is believed that increased consumptions of goods and the resulting affluenza associated with these behaviors benefits consumers as well as the corporations. However, these activities lead consumers to have increases in personal debts, mental health problems. In societies where worth is measured in material goods, rather than character traits, only the corporations benefit. Another is that China is currently experiencing newfound wealth and an emerging middle class. With this, there has been a major shift to consumerism from a more subsistence level style of living. With consumerism comes increased destruction of natural habitats, increased pollution, and further detachment from the natural world.

This is possibly because of the pervasiveness of environmental deterioration in China. However, the infrastructure (teacher training, materials, and support) to accomplish this has not been put in place (Wu, 2002). Recent trends in forestry and biodiversity

conservation in China reveal threats to wildlife conservation (Harkness, 2000). Harkness states that nature reserves are expected to produce enough revenue to provide a profit, as well as pay for their management. According to Edmonds (2000) and Palmer (2000), one issue facing the Chinese populace is that many people are not aware of, and participating in, environmental issues facing their country. Public involvement in environmental preservation is a relatively new. Chinas urgency to achieve material progress, suppression of local traditions, and disruption of connection to the land has taken a toll on the human and natural world. Much information on the environment has been suppressed, so many people are not aware of the severity of the issues. However, as China becomes more global, Chinese citizens are obtaining information, and pursuing action (Elkington & Lee, 2005). The impact of population growth on the environment and the resulting impact of environmental degradation on Chinas people are being investigated (Banister, 2000). Although the one-child policy was implemented to raise individual economic prosperity, not because Chinas ecological carrying capacity had been exceeded, this policy is seen as having many benefits, including environmental and individual health (Banister, 2000). China is transitioning from a centrally planned economy to a socialist market economy within which millions of people have been lifted out of poverty, these benefits have caused extraordinary environmental damage (Ma & Ortolano, 2000). The state of Chinas natural environment today is extremely sobering. Environmental degradation at the cost of supplying the world with cheap resources, goods, and labor in unsafe, polluting factories is dramatic (Ma & Ortolano, 2000). However, Elvin (2004) states that the origin of the environmental crisis in China predates modern times. Chinas history has been intimately interwoven with its environment, and citizens have garnered a living from nature just as other societies have (Elvin, 2000). Recently, urbanization and commercialism have allowed citizens to live far from the Earth, and traditional land ethics have been lost. Also, in the nearly three-decade later China will suffer to the future, even with current conservation measures (Shapiro, 2001). Problems such as desertification, salinization, acid rain, climate change, and river damming have long plagued China (Edmonds, 2000). Today, pollutions effects on human and environmental health are pervasive problems. The resulting health and aesthetic effects citizens face on a daily basis. Also, with the implementation of the One Child Policy 1979, major changes in child rearing occurred that have resulted in dangerously high levels of spoiling, and indoctrinating children with consumer habits previously unseen in China (E. Grinspoon, personal communication, November 1999; L. Luo & Y. Hu. The One Child Policy is Chinese government concern about the total number of the Chinese population. Rapid development combined with the exponential growth in Chinas human population 1.33 billion. The reasons for these demographic changes are complex and interrelated, however the One Child Policy (1979) is a key culprit. Only three decades ago, China was worried about having too many children to support. Also in the coming decades theyll be facing the opposite problem, as a result of the policy, China will have too few children to support a rapidly aging population. Which has resulted in the so-called 4-2-1 phenomenon (the one child grows up to support two parents and four grandparents. Now its getting worst thing is a declining fertility rate making matters worse, Chinas elderly population wont be able to rely on the traditional Chinese retirement plan. A rapidly aging population China has achieved in 50 years what it took most European countries a century to

accomplish: Increasing life expectancy from the 40s to over 70. As a result, Chinas 60+ population will increase dramatically from 200 million in 2015 to over 300 million by 2030. One huge future challenge, How to meet the rising demand for health care services and retirement benefits? With a virtually non-existent government pension and social welfare systems, Chinese leaders will likely need to reprioritize and shift resources away from investment and production in the coming decades. (Caixin, a Beijing newspaper). According to Peng Xizhe, dean of social development and public policy at Fudan University. now Chinas population dynamic has become so complicated. On the one hand, the number is still growing. Then we have the very rapidly aging population. Then we have the issues of big migration. And also they face the problem of the abnormal sex ratio at birth. Chinas strong cultural imperative for male offspring has led many families to do whatever they must to ensure that their one permissible child is a son. It effect of gender imbalance of the gender male and female, a tough One Child Policy baby a boy born but baby a girl? Its sometimes meant female infanticide. Among newborns, there are more than 118 boys for every 100 girls in 2010 it create a demographic nightmare that threatens China's stability and endangers prospects for greater political freedom in the country with the world's largest population. Over the next two decades, as many as 40 million young Chinese men won't be able to marry, settle down and start families. There won't be enough wives to go around. (By Paul Wiseman, USA TODAY) According 2010 Brookings Institute report on Chinas looming population crisis that a single number speaks volumes: Today, there are about 160m migrant workers in China. There are also about 160m Chinese people who are 60 years old or older. There are more than 160m Chinese families with only one child. Must Chines factories are using high labor and low technology only in the few decades later young Chinese labor will be over. What this means of course, is that there will soon be a sustained decline in new entrants into the labor force. Over the past three decades, political legitimacy in China has been built on fast economic growth, which has been powered by a seemingly inexhaustible supply of cheap, young labor. The number of workers aged 20 to 29 will stay about the same for the next few years, a precipitous drop will begin in the middle of the coming decade. Over a 10-year period, between 2016 and 2026, the size of the population in this age range will be reduced by about one-quarter, to 150 million from 200 million. For Chinese aged 20 to 24, that decline will come sooner and will be more drastic: Over the next decade, their number will be reduced by nearly 50 percent, to 68 million from 125 million. Other hand population replacement that the total fertility rate, which is the number of children a woman of child-bearing age can expect to have, on average, during her lifetime, may now be just 1.4, far below the replacement rate of 2.1, which eventually leads to the population stabilizing. Slower growth is matched by a dramatic ageing of the population. People above the age of 60 now represent 13.3% of the total, up from 10.3% in 2009. In the same period, those under the age of 14 declined from 23% to 17%. A continuation of these trends will place ever greater burdens on the working

young who must support their elderly kin, as well as on government-run pension and health-care systems. Such a drastic decline in the young labor forces are most of the changes discussed above would be beneficial only if China would benefit from increased labor supply. In light of the current situation, in which China is home to millions of rural-to-urban migrants seeking employment (some of whom have returned to the countryside as a result of the global economic slowdown), increased labor supply would seem to be a problem, not a benefit. However, the rapid increase in the elderly share of the population may bring major changes to the labor supply equation. At first, as the working-age share of the population decreases, disguised unemployment may yield to a changed labor market, and millions of unemployed or underemployed workers may enter the active workforce. In addition, and as the working-age share decreases further, the changes discussed here may become particularly relevant to China; the factors that could lead to greater labor force participation may become operative, investments in human capital may see higher returns, and immigrant labor may be welcomed. The trajectory of savings rates seems harder to predict, as it depends in part on whether more people enter the labor market and have funds to save. Affect to economic growth? Analyze is the effect of population aging on economic growth in Asia. After considering the various forces that have led to population aging in China and elsewhere (lower fertility rates, rising longevity, and the effect of past variations in birth and death rates), they review the behavioral responses to aging that could modify the impact of aging on economic growth. These responses include increased participation by women in the labor market, greater investment in children's health and education, and changes in savings behavior. The increase in annual average percentage growth in GDP per capita in China between 1965-70 and 1995- 2000 and find that higher life expectancy led to an increase of 1.0 percentage points in the growth of GDP per capita and that the increase in working-age share led to an additional 1.0 percentage points. It is not necessarily true, however, that the coming increase in the elderly share of China's population will lead to a mirror-image fall in the economic growth rate. The elderly do not impose as large an economic burden on an economy as does an equivalent share of young people-perhaps because the elderly tend to contribute, if often only informally, to a family's income and well-being. Much more speculatively, the compression of morbidity may lead to a smaller increase in health expenditures on the elderly than might have been expected on the basis of increased life expectancy. Another reason that we have not examined is the possibility that an economy that has reached a higher steady-state level of income may be more flexible in adapting to and efficiently responding to the needs of all segments of the population, including the elderly.

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Conclusion China a consumption transition is taking place in which people shift towards more affluent types of consumption pattern. This transition is taking place at different stages and form. Consumption may be the cause of many social and environmental problems, it is also crucial to human survival. This is the ultimate paradox. Indeed, consumption is a powerful vehicle through which present and future solutions to the problems of unsustainability may be reached. Consumption is the embodiment of a new paradigm for consumption in China. A key factor in its probability of success will be the empowerment of young change agents for sustainable consumption. Today's Chinese society and consumer behavior, closely related to the combined experience of generations of Chinese. It is only through increased research in the future. In an era of consumerism and affluenza, future research investigating compulsive buying, a serious personal, social and economic disease, from the perspective of individuals and groups is needed. Impact of the population aging in China has caught the attention of Chinese policymakers and many others. A straightforward reaction to this phenomenon would be that a population consisting of an unprecedentedly high elderly share spells trouble for the Chinese economy. After all, there will be a very large number of older people not working and needing care, and there will be fewer working-age people to support them. In addition, with continued small cohorts of children, the working-age share will continue to fall. Who will make the products and provide the services to satisfy China's domestic demand and to staff its export industries

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