My very Chinese Malaysian wife saves string. She saves practically everything that comes into the house that can be used again, but the string is notable because it comes from the small bags in which Kuala Lumpur's roadside mamak stalls serve drinks — takeaway cups at a fraction of the cost of the ones used by companies such as Starbucks.
A hawker pours your drink into the bag, knots a top corner, inserts a straw, pulls a loop of string around it all, and you're good to go. You can hang five from one finger and not spill a drop on your way to the office. I needed a little string to stake some tomato plants recently and she pointed me to a bunch of loops hanging in the kitchen. It has taken some cajoling to get her to throw away the straws and bags themselves.
Though generous with family and friends, she will push a cart full of groceries to the other end of a mall to save 5 cents on two litres of milk. When buying a pen, she gives me the evil eye for being slow to whip out my loyalty card for the points. Our sons might be outgrowing their school uniforms, but they will wait until the next year for new ones.
That is the frugal culture prevalent in the Chinese diaspora across east Asia, and it stems from the historical need to be secure in later years. Americans will pick up a $3 coffee each morning whether they are going to work or to the unemployment office. Chinese won't.
China has nothing like the west's social security systems. If you are lucky, the one child you have is a son — for whose education you will have saved up — because you can move in with him and his family when he has his own home. (If you are really lucky, your daughter-in-law will like you.) If you are not lucky, your daughter — for whose education you also saved up — becomes someone else's daughter-in-law, and you're on your own. You probably do not have a company pension; but you would not be living large on it, or on what the government might give you, anyway.
You have saved your whole life, as your parents and their parents taught you, and as you teach your own child and grandchild. It was never about having the most toys or about winning; it was about your old-age health, and maybe a place with indoor plumbing. The 600m Chinese who live on a few dollars a day are just a statistical concept to westerners, but they are family to the country's emerging middle class.
Changing this culture from saving to consuming was never going to be easy, and was never going to be accomplished by government prodding. Sure, China's millions of newly prosperous are happy to consume — conspicuously — but not because the state says so. They are a small percentage of the population anyway, and there is a limit to the macroeconomic impact of even their spending. For everyone else, it will take a confidence in Beijing that has been greatly shaken recently, if it ever existed, by the failure of one state intervention after another to put paid to stock market volatility. Good luck with that.
Even living in a controlled society driven by propaganda, Chinese people know state-issued reports are often not accurate, that ghost cities are not productive, that the crackdown on corruption feels cynical, and that massive government lending for infrastructure cannot be good. Now they have learnt how markets work, and that Beijing cannot really control them, the hard way.
Millions of Chinese are thought to have opened new trading accounts — and lost hundreds of billions of dollars — this year heeding the government's sweet talk about good times ahead in the stock market. This week's devaluation of the renminbi is more bad news. You think a few per cent is small change? My wife stocked up on groceries in March before Malaysia's six per cent sales tax kicked in on April 1. So did most of her friends. So did most of Malaysia, if local retailers are to be believed.
For Chinese saving to send a child to a western university, worrying about how many renminbi you will need to buy dollars or pounds when that day arrives does not make you want to buy a new iPhone today. My wife had to change universities in the US when the ringgit tanked in 1997. Plenty of Chinese people around Asia had similar experiences.
Beijing's recent financial market moves, which seem more desperate than wise, will not convince more citizens to spend at Starbucks instead of mamak stalls. Nor will a less certain future stop China turning into a consumer society. Centuries of sensible frugality will do that. Either way, it will take more than a few years of state prodding and propaganda. So don't hold your breath — and, if the economic engine that has driven much of the world's growth in the past two decades keeps sputtering, you may want to save string.