The Chinese characters for moon, light and person combine to form a completely new word today that did not exist a decade ago. Together they take on the meaning of "monthly," "empty" and "person" and mean a new type of person in China who receives a monthly paycheck but has nothing left at the end of the month.
This is a new term because saving money has been the only way to survive for three thousand years. Today’s grandparents and parents went hungry and sacrificed so that this new generation would not go without. And many in this young generation intend to make their parents happy — by not sacrificing at all.
This is not to paint all Chinese students with the same brush, for there are many still coming from the poor rural countryside who must save every penny.
This new Chinese affluence comes with Chinese characteristics. While save-for-your-descendants has been the major theme for ages, a little known counter philosophy has emerged from their classical history to give legitimacy to selfishness.
"If my son is less capable than me, there is no use saving money." [He will just squander it.]
"If my son is more capable than me, there is no use saving money either." [He will himself make far more than me.]
Conclusion: Might as well spend all of what you get.
Confucius would not be happy.
But Ayn Rand couldn’t have said it better.
Fortunately, China’s portion of spendthrift youth is small and they are not yet in the drivers seat in this economy. For the near future, China’s economy will continue to rest on generations that average saving 40 cents of every dollar. That compares to the U.S. where many folks continue to spend more than they earn.
Saving is such a part of past culture here that there are several varieties. "Lin sze" refers to a harsh and miserly saving that lets the coins build up while your children go hungry. Older readers will remember the character Silas Marner. The new generation can visualize "Lord of the Rings" Gollem: "We wants it. We needs it. Must have precious." Neither of our cultures value that level of hoarding.
Then there is "jye jian" or conscientious and reasonable saving for a rainy day. That is the savings that China has been noted for, and it is a main driver of China’s development. Like the Eskimos who supposedly have 20 words for variations in "snow"” [they don’t], you know that if there are more words in a language for something, the concept must be really common and complex.
China’s banks are heavily regulated to maintain financial stability. Savings accounts earn a pitiful one percent. So many extended families combine resources to form family investment pools. This shadow banking system resembles loan sharking. It is unregulated, earns high interest rates, and a borrower who defaults could get their legs broke. It is generally illegal.
Much of this money ends up supporting the housing boom. All over China there are new high-rise apartments still going up. If the economy continued to grow at pre-2007 rates, there would be ten million new middle class Chinese needing housing each year. Those rents are an excellent and continuous investment return. But with the global slowdown, China has been unable to bring as many into the middle class, and many new housing units stand empty. In contrast to the American housing bubble that was built on debt, the Chinese apartment bubble is built on excess savings. The housing that remains unoccupied merely reduces the investor’s return—a fact completely lost on American reporters.
The other major investment is in the education of their children. And that boom hasn't stopped.
With 190,000 Chinese students coming to the U.S. this last academic year, some will be month-empty-people who will be carefree, buy a car and wear brand-name clothes. And there will still be those whose family was poor and the student feels the burden of their sacrifice.
In either case, these students are still among our most studious. Without this supply of 190,000 Chinese students each year, the U.S. would need a new term for "student-empty-university."