As China Goes, So Goes the World: How Chinese Consumers Are Transforming Everything (review)

Although China is often considered the “global factory” who acts as a major producer in the world, it is becoming the new vanguard of global consumerism with the deepening of market economy. With its 1.3 billion population, China is transforming itself and the world rapidly.

The book “As China Goes, So Goes the World: How Chinese Consumers Are Transforming Everything” by Karl Gerth, a professor of Chinese history at Oxford University, sheds light on China’s consumption patterns and its global implications by providing a detailed in-depth and multilevel analysis of the rise of China’s Western style consumerism and the effect on its society, economy, government policy, environment, and on the rest of the world. The book covers a wide range of issues including the growth of the personal car industry, the role of consumerism in fostering class consciousness and stratification, Taiwan’s vast direct investment in China and its role of accelerating the restoration of China’s consumer culture, China’s huge market for fake products, the existence of an extreme market for endangered species, sex and international adoption, and the environmental consequences of China’s dramatic changes. In the end, it raises a critical question: what should China and other countries do to enjoy modern consumer benefits without exacerbating their many downsides?

The main argument in this book is that China has developed a deeply entrenched consumerism in all areas of Chinese life. They are already shaping the world’s future with help from their counterparts in other industrialized countries. However, China’s development of markets is also creating unintended negative consequences for China and the world, including the undermining of confidence in brands due to counterfeits, the spread of extreme markets, and serious industrial pollution.

The book begins by emphasizing the growing power of Chinese consumers since the 1970s market reforms. As Gerth points out, China has been transformed from being a country of shared scarcity and immobility under Mao Tse-Tung to an integrated market with circulating people and abundant products. The results are, on one hand, the creation of a new aristocracy with powerful political connections, and an urban middle class of consumers with an increasing disposable income which is clearly catching up with their counterparts in wealthier countries in both domestic and international consumption. On the other hand, the Chinese government has deliberately aimed to reduce the country’s overreliance on exports and has encouraged Chinese consumers who are traditionally thought of as savers to spend more. To set an example, now China has surpassed the United States as the world’s largest car market, while Shanghai, its most representative city, has become a destination for global customers.

Another important point studied by Gerth is the creation of Chinese national brands. In recent times, Chinese government officials, business leaders, and academics have urged domestic companies to climb the value-added chain by developing technology and owning globally competitive brands. However, such activity also promotes brand nationalism, which can preempt foreign trade. Additionally, foreign firms in China are forced to adapt international brands to local tastes, which results in market segmentation and failures in standardized mass production. At the same time, the building of China’s national brands is undermined by China’s huge market for counterfeits. The most significant reason, Gerth argues, is due to an irresolvable tension between national and local interests. This means although the national government tries to enforce intellectual property rights, localities have a greater interest in producing fakes as it helps to finance local industries under the pressure of decreased national subsidies for state-owned enterprises. Although fake products provide customers with better prices and a wider selection, they ruin the domestic and global brands by pulling in consumers using much lower prices and by damaging the brand’s reputation with low quality. More importantly, the safety concern created by Chinese counterfeits is making...