China Communicates - Part II
More impressions from my recent trip to China — based largely on people I spoke with, what I heard and what I read:
Money. The attitude in Chinese families is that money is a legacy that gets passed down from generation to generation. Giving charity is not held in the same high esteem that it is here. Both Buffet and Gates visited China and urged rich people to help poor people through charitable donations. Very little came of it.
Taxes. Wealthy people don’t pay much in taxes “because they became rich through their connections with people in the government. Taxation falls on others in society.” Further, there is a 17% sales tax which hits the lower and middle class disproportionately.
Where the Wealth Is. According to one person we met, the U.S. puts people first and the government second. In China it is the reverse. Thus, in China the government is wealthy rather than the people, because the government takes a role in almost every successful enterprise.
Average Salary. The average income for a lower middle class family of four is about $10,000. In the larger cities, such as Beijing, it may be double that.
Cars. Nationally, 55% of people own foreign cars and 45% own Chinese-made cars. In the larger cities, it’s 80% foreign and 20% Chinese. There are seven national brands of Chinese cars. Ford does not have a good reputation: it is known as Fix Or Repair Daily! German cars are the most expensive. People tend to like the Chevy. Young people like the Honda Civic, the Nissan Infinity and the Lexus. Every Japanese brand makes three tiers of cars: it sells the 3rd tier to China, the 2nd tier to Japan and the 1st tier to the U.S.
PART III (the final installment) will appear on Thursday!