Know Who You Are Competing Against
Being frugal is a virtue – The idea of being frugal actually goes back thousands of years. A belief that has permeated Chinese society for a hundred generations is that the three treasures are love, frugality, and generosity.
Save as much as possible – The average Chinese citizen is still very poor. While some are getting rich, the average income per person is only $865 per year! (the millions of poor rural farmers really brings this average down) And yet the average savings rate for the Chinese is 30% according to many sources.
Chinese are not huge fans of credit cards – The Chinese tend to pay for everything in cash. This was illustrated when the Communist government recently allowed private citizens to purchase their own home. Almost everyone that purchased a home, including the middle class, paid cash for their home. And these weren’t shacks. Ordinary workers were able to pull out savings equal to 10 to 20 times their annual earnings!!! Can you imagine?
They are not afraid to haggle - In China, everyone negotiates. As a heads up, if you ever visit China, retail is marked up 50% to 75%... so never pay retail… bargain down the price or you will have overpaid.
Your income is not private – In China, it’s not rude to ask how much a person makes… in fact, they consider this information as a great way to get to know someone. In general the Chinese people are very upfront about what they make. If you ask them, they’ll tell you. Money is not a taboo subject.
What’s the best gift? – It’s not an ipad for the Chinese… it’s cash. The absolute best gift you can give is a red envelope with cash inside. They think people should be able to buy what they want (maybe I’m crass… but I like this one!)
Other than being interesting, what should be taken from this article? The biggest thing was the amount of money they saved, even though the average Chinese is much poorer than the average American. A Chinese business owner was interviewed recently— he made the equivalent of about $15,000 per year selling food on the streets. Not only did he provide for his 6 person family but he saved 40% of everything he made. When the interviewer asked him how he could do this, he just said, “I have to for emergencies.”
The Chinese don’t have medical insurance, medicare, or social security—you are on your own. Makes sense to say that necessity is the mother of not only invention…. but savings too! As our government begins the challenge of overcoming our incredible debt, we may soon begin to see a cut in our own services we relied on for years. It certainly may make some sense to take a lesson from our competitors across the ocean and save a little more for ourselves and our family!
