“With Chinese characteristics” was a phrase that we heard a lot in China – as in, they’re embracing Capitalism, but with Chinese characteristics, or, they’re building an open source software industry, but with Chinese characteristics. Ultimately, it means that as a nation they’re doing more things that the Western world has done for a while, but in a way that may appear Western, and use the same words to describe it, but ultimately is something different.

In Shanghai I was struck by the intense consumerism: there were Ferrari & Mercedes dealers everywhere, there were legitimate high-end fashion stores on both the street and in 10-story shopping malls, and, of course, there was a Starbucks (with Chinese characteristics) on every corner.

The Starbucks stores were notable in that they sell basically the same set of stuff as everywhere else for food & drink, have the same set of coffee mugs & travel mugs (often manufactured in China for sale around the world), and everything sells for essentially the same prices as they do here in the States. A latte is 24 RMB (about $3). A travel mug is about $12. Presumably a Mercedes costs a lot, too, although I didn’t check. (Fun fact: Audi A6s were everywhere in both Beijing and Shanghai – actually they were A6 Saloons, or A6L (for long) – I understand that the A6L plants are primarily in China.

And every one we went to or walked by (a lot of them) was packed. Much more crowded than any I’ve ever been to here in the US.

I think that’s somewhat emblematic of my experience in Shanghai – relative luxury items, priced at US prices, with extremely high demand. (There were plenty of fakes markets as well – which also had a lot of folks – but not as many as the legitimate vendors.)

It’s a strange thing, though – I think twice before paying $3 or $4 for a cup of coffee (which doesn’t keep me from doing it regrettably often), but I’m pretty sure that salary ranges in China, even in the cities, are nowhere near what they are in Japan, the US or Europe. (There was a newspaper report while we were there that Guangzhou (I think), one of the major cities in the South with more than 5M people (which makes it bigger than Toronto, Philadelphia or San Francisco) just crossed $10,000 USD in annual per capita income.)

It seems to me that this will inevitably drive wages higher (and thereby costs of doing business in China), which has been widely reported, with tech companies moving manufacturing to Southeast Asia for lower costs. But more than that, it seems to me that this is a major impediment for China to create what popular press is terming as the largest middle class in the world. If wages don’t accelerate to catch up with prices, being middle class won’t exactly mean what it does here. (Related obvious thought: being middle class here in the States isn’t what it used to be either. Coffee at $3 or a tank of gas at $50 should illustrate that point quite well.)