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You Nuo

 

There is no better showcase of the nation's manufacturing power than the Beijing motor show.

 

I went to the auto show over the weekend and was very impressed.

 

Thundering noise boomed from the exhibitor's displays as one company after another revealed its new model cars. Crowds of young motoring journalists a relatively new media profession here in China grasped big cameras and wore colorful jackets, which advertised various cars, tyres or lubricants. Young ladies marching in extremely high-heeled shoes and wearing futuristic costumes turned heads and revealed another new profession called "car babes".

 

I didn't get much of a chance to really view the cars - even though it was supposedly show's media day. A motor company PR told me that every auto show around the world was like this.

 

The busy atmosphere reminded me of the electrical home appliances shows and high-end consumer good exhibitions staged in China 20 to 30 years ago. These events first had a restricted audience and were gradually open to public in the early 1980s. The only difference between the current motor show and the old exhibitions was most visitors back then were still wearing blue Mao jackets.

 

Both crowds showed a similar yearning for all the shing things on show, however remote they might appear, as they were once all associated with the developed economies in the Western world.

 

For more than 30 years, consumer yearning has shown no signs of abating. The eyes that used to stare at imported Japanese-made electrical fans are now hungrily staring at the latest Toyota cars. This consumer psychology is the gold mine of every market economy. China has grown out of its old planned economy in less than three decades with a successful record partly because of this psyche.

 

This powerful consumer yearning can, in less than a decade, helps turn this nation into a world-class manufacturer of automobiles and even airplanes - despite all the business disputes and trade barriers that may occur in the meantime.

 

However there may be only one thing holding back the change and just like the planned economy of 30 years ago, the problem is not something that exists outside of China.

 

Much of China's consumer enthusiasm will be eroded if social reforms are further delayed. These are the reforms of social security, the medical service and public education - and the rooting out of corruption in the administration of the related public funds.

 

There have already been delays since the late 1990s. What a loss, if the tremendous amounts of consumer money, enough to sustain China's manufacturing boom, would be diverted into pure savings and sleep in personal bank accounts. People are hoarding their cash because of uncertainty about the future.

 

Even greater opportunities will be lost if there are more delays from now to the end of the decade.

 

The personal savings may never find their way into the consumer market as problem of ageing is beginning to spread rapidly in the cities, most noticeably in the economically advanced places.

 

Having said this, the welfare reforms really have a much wider range of significance than just giving more help to the poor and needy. They should not be viewed separately from the parts of the economy that yield direct sales.

 

Nor should they be considered something only to follow other parts of the economy in progress. At this point, social reforms are to be the leader and driver of the economy.

 

(China Daily November 20, 2006)