The Middle Class in China (3)

by Tzy C. Peng

	What does the family budget look like?

	The average estimated family budget look like this: Accomodations, 
10-40%;  food and clothing, 20-40%;  consumption, 5-10%; education, about 
30%; and rest, recreation and travel. 35 - 0%. As you can see, on the 
high end, even with zero recreation, the figure add up to 120%. Obivousely 
some adjustments need to be made.  So, some explanation is in order.

	First of all, these budgetary numbers are at best personal estimates, 
designed only to yield some insights into how people spend their money. 
Please, don't take it too seriously.

	Secondly, these numbers comes from a consensus of 5-6 families.  They are 
by no means a yardstick to measure society as a whole. However, if these 
numbers interest you, a more detailed and broader survey should be 
conducted.d It is best to leave these systematic surveys to government 
officials or well-funded private institutions with adequate resources.
Thirdly, the variation of a family budget is enormous from household to 
household depending on the makeup of the family, particulars on personal 
interests, habits, and individual/business burdens of family members. 
Having said all that, some general characteristics about current Chinese 
families, especially the middle class are worth mentioning.

	The previous generation, age 60 and up, has done nothing but save, save, 
save to get through difficult times in their days. Many of them have 
acquired a nice tidy sum either in bank deposits or in valuables. They 
are old, and are not accustomed to spend, spend, spend philosophy, So 
their accumulated wealth is likely to be transferred to their next 
generation who are in their 40-60s. 

	The next generation(age 40-60), relatively speaking, have suffered much 
with their parents, but are now prone to the idea that they deserve some 
fun and enjoyment in life. So they are more apt to spend not only their 
own money but also the expected inheritance from their parents. That 
inheritance is an extra-income to them, and a convenient subsidy should 
they spend beyond their own family income.
	
	This is also the generation that has lived under the official one child 
policy. Unlike traditional Chinese family with 3 or more kids, the one 
child policy allows the only child to receive 3 or more times the money 
for his/her needs or wants.   Thus, the current generation (age 10-30) 
have huge potential financial resources to draw from, and they are making 
most of it from their willing parents and grandparents. 
	
	The current generation, again relatively speaking, have not suffered 
hardships or poverty, and a large majority of this generation believes in 
enjoying life to its fullest by the spend, spend, spend philosophy until 
the financial well runs dry. Even then, they think that their parents, or 
grandparents, will always come to their rescue and bail them out.

	So this is the reality which explains partially the strange phenonmen why 
people often spends beyond their means. Young people readily spend large 
sum of money in expensive restaurants and high cost recreation facilities. 
 Young adults are very apt to spend 1,000 or more yuan for a banquet with 
friends. (to be continued)