How rich is China? Many number crunchers have discussing that issue over the past few weeks. But the assumption China is a poor country, displayed in a blogpost at the Guardian, is certainly not true, writes an angry China veteran Mario Cavolo on his website.
Let’s look at China’s millions of poor, miserable street vendors, the ones we are supposed to feel sorry for because they only earn a few hundred dollars a month; many are actually earning more like $1500-$2000/month, all in cash. We know those same street vendors have admirably low daily living expenses and once again, NO mortgage or extremely low rent and other budget expenses.
We also know that over the past three years alone, China’s rising lower-middle classes have purchased 60 MILLION mid-priced automobiles, 80% of which were paid for in cash. Another 20-25 million will be purchased in 2014. Note that I am not talking here about the rich people buying luxury cars; only one million luxury cars were sold in China in 2013.
Poor by living standards?
China has 300 million rising middle class earning more than ever even after adjusting for inflation, and with 90% of households owning their home, on which the majority have NO mortgage and are worth across China’s 2nd tier cities $150-$200,000 dollars. Many of those families in fact, owned more than one home and sold one of them off, now holding that money in the family bank account.
Ah, so then we must mean the poor farmers. After all, there are 600 million of them scattered across the countryside and they’re all poor, right?
Except that the farmer family we visited this past weekend has 40 private customers for whom they provide a home delivery service into Shanghai; they deliver 4 kilograms of fresh off the farm vegetables each week 50 weeks per year for a monthly fee of 350rmb. Let me help, that’s 14,400rmb per month/US $2300. One might agree its not a stretch to suggest that 20% of the farmers across China who possess a sense of entrepreneurial spirit to earn extra income, all have similar, extra income streams we are not privy too. When you visit their farm, indeed, it seems a rather messy, unkempt place and might still believe they are poor; until you find they live in that three story villa 300 meters away. There is much reality beyond what the eye can see.
That’s another thing about the farmers; why do so many of them live in really nice 3 story farmer houses if they’re so darned poor? I mean, seriously, it seems everywhere you look across China’s farm country, the farmers live in private 3 story villas, which by the way, they built themselves at a cost of around $15/sq ft. Is there fancy wallpaper? No. Is the furniture from Ikea or LazyBoy? No. Do they care about that? No. Is it an easy life? No. Ah, but are they poor? We cannot buy into such generalizations. Yes, many are poor while many are obviously not.
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