• Kate Chang

FAQ #7

FREQUENTLY ASKED QUESTION

#7 - Q: Will this severe virus infection in China cause the Chinese economy to crash, and affect the consumer spending power of the nation? A: Recently, we have had a lot of brands write to us, including those we have already confirmed officially as partners and those we are still in communication with and who are interested in cooperating with us, to ask about the virus and its impact; and because we have gotten quite a high volume of these types of queries, we have decided to address this on our website for convenience. Indeed, it’s quite obvious that this has already impacted China’s economy greatly, it hasn’t been hard to stay abreast of this through the news, so I will not take time to repeat that information here. Instead, I only hope that I can provide my perspective on this situation, from the eyes of a Chinese person who was born in America, and educated in America, and speak my point of view on how this virus will impact China’a economy and spending power going forward. When evaluating whether or not there will be an impact on China’s economy, and whether there will be negative side effects from this, we have to look at it from the perspective of history, China’s current situation, and the mentality of the Chinese as a people and nation; in addition, we have to consider also the components of the social structure in China, in order to make a meaningful analysis and make a realistic judgment. Just as I have repeated to all of the brands I have met personally, or even to those I have not yet met, but have only communicated with (who want to work with us) , China, is a vast, vast country - it covers 9.6 million square kilometers in land mass, there are 56 different ethnic groups, and it is a country that has nearly 5,000 years in its recorded history, and a population that totals 1.4 billion people. This is a highly complex, massive country, and its history is steeped in and deeply influenced by the “Rujia”, or Confucian culture, which holds as its essence the concepts of humility and tolerance. For a country with such a long history as China, it will have a firm and sometimes unexplainable persistence when it comes to its own culture and heritage. At the same time, Chinese culture, like any ancient culture, over such time, will have its essence, and also its unnecessary byproduct, as well. The Chinese are second to none in this world, when it comes to the high level of its reverence of ancient culture, so as a result, some of this unnecessary byproduct of this culture, is also inevitably combined into the essence, and passed down with equal intensity, and even revered as well. Often, it seems that in the last several hundred years, Chinese have only cared about preserving their cultural essence, and remnants, and passing it down for posterity; they have forgotten, that actually, culture is still continuously developing, evolving, and it won’t stay the same, or change, just by sheer will. This has created a situation where in our history, even now, Chinese people have a lot of habits, and many of them are bad ones, that have persisted through the ages having been at some point, intertwined with our culture. Some of these bad habits have even brought the Chinese people of today, a lot of harm. Just like the virus that has sprung up in recent months; this is because Chinese people have traditionally eaten wild game, and have not paid enough attention to the hygienic and sanitary process in preparation. This allowed the virus borne by these wild animals, to infect humans. The epicenter of this outbreak, was in a city called Wuhan. But why, would this have happened in Wuhan? I believe, that it occurred in Wuhan, due to the incongruence and imbalance of socio-economic class, in the societal structure in China. In China’s Tier 1 cities like Shanghai, for instance, or Beijing, Guangzhou and Shenzhen, the quality of life is already very close to that you can find in New York, Tokyo, or other major cosmopolitan cities in the world, it is virtually the same. But Wuhan, while it has already surpassed ten million in population, and is also developing very quickly and has a high GDP of its own, it is still a city that only reached several tens of millions in population, in recent years only; after the reform and opening up policies were instated. Huge rural to urban migration toward the city, has also brought with it the bad habits of the rural population, too. So for a city like Wuhan to become the epicenter of the virus, instead of a Tier 1 city having been the source, is not surprising at all. But it is true, that the impact caused by the virus this time to China as a country, has been very deep. It has stricken fear into the heart of every single Chinese person. It has also given pause for reflection: is it time to change these habits they have insisted on for ages, and finally give them up? They have started to understand, that for China to become a modern country, and stand on the global stage with the image of a modern country, changing these bad habits, and letting go of these non-essential cultural remnants, is going to be very important, and they have started to question, whether or not some of this culture and these habits, should finally be changed. Every Chinese person is now, I believe, making changes to their behavior, even subconsciously. Chinese people, are the same as every other great people in the world. After suffering setbacks, they learn hard-won lessons from the setbacks and make changes. I believe that this state of mind, will accelerate in each of China’s cities, and will manifest itself in the changes, however big or small, in each Chinese person’s behavior. Here, I want to turn our conversation to Paris, the capital city of France. In its history, Paris was once a city with very poor sanitation. We can glean this from the novels written about or representing those times. In order to understand how the city of Paris constructed such a remarkable system of sewer networks, we have to look at the sanitation conditions of Paris at the time they were constructed. The plagues that ravaged Paris and the rest of Europe throughout history caused so many deaths; and the city officials created the first underground sewer network soon after; it was then refined and improved over the centuries, and today, it is even a tourist attraction to view the complex sewer network, and witness the engineering feat that keeps the city clean. We can understand this action to be a kind of declaration of war against the bad habits leftover from cultural remnants of that part of their culture. Paris was not defeated as the result of this sanitation problem; but through the course of these improvements, the people changed their habits, learned hard lessons, and built their city’s sanitation system into a shining example for other modern cities. As a result, I believe that Chinese people will be like the French, they will learn from the experience of undergoing this virus outbreak, they will change the way they behave, and become a sanitary, environmentally friendly country. And Chinese people will also, from this experience, learn where they went wrong, and fix their problems. This is a very unfortunate situation, but I feel that it will become an inflection point where by Chinese people will really change their behavior and take a firm step into this modern world. That is why I do not feel that this outbreak will cause a devastation of the Chinese economy, and I similarly do not feel that it will bring about a crushing impact on consumer spending in China. I think, it is an inevitability, that the Chinese economy will stand back up amidst this outbreak, and come out stronger. I have complete faith toward this, and the way this situation develops, will prove whether my analysis is right or wrong. I feel, of course, that my analysis will be completely proven correct.


Best,

Kate Chang

CEO

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