Conspicuous Consumption in China

(New York Times)  China's Elite Learn to Flaunt It While the New Landless Weep.  By Joseph Kahn.  December 25, 2004.

Chateau Zhang Laffitte is no ordinary imitation. It is the oriental twin of Château Maisons-Laffitte, the French architect François Mansart's 1650 landmark on the Seine. Its symmetrical facade and soaring slate roof were crafted using the historic blueprints, 10,000 photographs and the same white Chantilly stone.

Yet its Chinese proprietor, a Beijing real estate developer named Zhang Yuchen, wanted more. He added a manicured sculpture garden and two wings, copying the palace at Fontainebleau. He even dug a deep, broad moat, though uniformed guards and a spiked fence also defend the castle.

"It cost me $50 million," Mr. Zhang said. "But that's because we made so many improvements compared with the original."

Rising out of the parched winter landscape of suburban Beijing, like a Gallic apparition, the chateau is a quirky extravagance intended to catch the eye of China's new rich. They can rent its rooms and, later, buy homes amid the ponds, equestrian trails and golf course on Mr. Zhang's 1.5-square-mile estate.

It is even more conspicuous to its nearest neighbors, 800 now landless peasants who used to grow wheat on its expansive lawns.

In a generation, China's ascetic, egalitarian society has acquired the trappings and the tensions of America in the age of the robber barons. A rough-and-tumble form of capitalism is eclipsing the remnants of socialism. Those who have made the transition live side by side with those who have not, separated by serrated fences and the Communist Party.

The party's Central Committee conducted a survey of party officials in November in which the widening income gap ranked as the biggest concern, mainly because it stirs social unrest. Farm incomes were raised this year after emergency rural tax cuts. The government has tried to slow land confiscations.

But officials have chosen not to give peasants control over the land they farm, effectively denying them a share in the new market economy.

Meanwhile, the fleet footed and well connected have profited from surging exports, a bubbly urban real estate market and, occasionally, government boosterism. A wide income gap, like that in Britain and the United States at the end of the 19th century, is viewed by some officials as inevitable, even a rite of passage.

China now has tens of thousands of multimillionaires, some of whom do not follow Confucian or Communist codes of austerity. In fact, pressure to stand out may be overtaking an earlier impulse to lie low.

Mr. Zhang, 57, is a Communist Party member and former senior official at Beijing's municipal construction bureau. He made a fortune building private homes before he secured rights to a sprawling parcel of wheat fields. As the first step in his next project, he cloned the palace and named it after himself.

He is wary of the political symbolism. His mirthful confidence gives way to bureaucratic hedging when he is asked to discuss the wealth gap. But he defends his indulgence as an excellent investment.

"Beijing is so crowded with luxury real estate projects that you need to do something special now," he said one afternoon while leading visitors through the marble atrium of the chateau. "Buyers want the right environment so they feel they are fully realizing their identity."

The bold display does attract attention, some of it unwelcome to Mr. Zhang. The residents of Yangge Village, who farmed the land as a collective until Mr. Zhang persuaded local leaders to let him develop the property, have led a tireless campaign for higher compensation.

As part of a complex arrangement to use the land, Mr. Zhang's company gives the village's elderly a $45 monthly stipend. The able-bodied young can apply for jobs maintaining the grounds and waterways of the estate, or crushing grapes from its vineyard. They get $2 a day.

For them, Mr. Zhang's French revival smacks of a retreat to feudalism.

"It was once our land, and now we have to apply to work there," says Li Chang, a local peasant activist. "To look at the place brings tears to my eyes."

The Chinese Academy of Social Sciences estimates that at least 10,000 businessmen in China have net assets that exceed $10 million. Some of them are peasants or migrant workers who saved every penny, devoted endless hours to their jobs and got rich despite overwhelming odds.

Many others are like Mr. Zhang. He grew up in a peasant household in Shandong Province, in northeast China. But his prospects brightened at an early age, courtesy of the Communist Party.

His older brother, then a young worker in a state factory, was transferred to Beijing, bringing along his whole family. Mr. Zhang attended school in the capital.

He got a second break in the late 1960's, during the Cultural Revolution. Others were sent down to farms to work in the fields as part of Mao's effort to inculcate revolutionary enthusiasm among the urban elite. Mr. Zhang joined a construction brigade, quickly becoming a manager. After attending college, he rose to the top ranks of the construction bureau, which oversees major building projects in the capital.

Mr. Zhang "plunged into the sea" of commerce in 1991. He found a wealthy southern partner who needed help breaking into Beijing's real estate market, then just shaking off the shackles of state control. Mr. Zhang was an insider who could navigate the opaque bureaucracy.

Their first project, called Baxian Villas, was not without risk. They found a plot of farmland surrounded by villages near the northern tip of the city. The secondary roads leading there passed through street-side markets that filled up with produce vendors by day. The trip could take 90 minutes.

Yet at the time Beijing had few other California-style single-family houses like the ones Mr. Zhang built. By the late 1990's, Baxian had sold 500 homes, many of them spacious weekend retreats priced in the hundreds of thousands of dollars. They had acquired the land for a tiny fraction of that amount. To use a popular Chinese term, Mr. Zhang was a baofa hu. He had hit the jackpot.

In 1995, he commissioned a Chinese artist to paint him together with his wife, son and daughter. Mr. Zhang told the painter to copy a style he had seen on a tour of Europe. It resembles a court portrait by Velázquez. The Zhang family poses casually in the center of a neo-Classical reception hall, whose walls are hung with other paintings - each one depicting a villa designed by Mr. Zhang. It covers an entire wall in the ballroom of his Baxian home.

His fortunes improved further as the city expanded to meet him. His retreat became a bedroom community with its own highway exit.

So Mr. Zhang set his sights on a much larger slice of land - nearly 1,000 acres - used as a mechanized wheat farm by Yangge Village and its 800 farmers. A river ran through part of the property, which abuts a forest preservation district. By Beijing standards, the setting was bucolic.

Beijing's city government has tried to slow the loss of rural land. But Changping District struck an unusual deal with Mr. Zhang. The area he coveted would be converted from farmland to a conservation zone. He could then lease the land for an annual rent of $300 per acre, provided it mostly remained green space, according to villagers briefed on the arrangement by local officials.

He was later granted an easement for the palace and a second one for a community of 1,000 luxury homes covering 170 acres. For that change in the contract he paid a lump sum of $9.7 million, or about $57,000 per acre, according to villagers. He declined to discuss the figures.

Mr. Zhang is not one of China's richest men. Lists of the wealthy elite compiled by Forbes and Asiamoney do not mention him. Beijing alone has dozens of real estate companies that control more land.

But the property gave Mr. Zhang a vast canvas to achieve something outstanding, he said.

"I wanted to show how Beijing was rushing out to meet the world," he said. "We have the Forbidden City. We have courtyard homes. I wanted something universal."

As he pondered his new project, Mr. Zhang developed wanderlust. He visited Australia, where his son was studying. There he researched the wine-making industry and decided to go to France.

At a conference in Beijing, he met Françoise Onillon, a Paris-based architectural expert, and hired her as an adviser. In the summer of 2000, she planned a two-week trip through Bordeaux, Burgundy and Beaujolais to see historic chateaux. But the day Mr. Zhang arrived he wanted to begin immediately. So she took him first to Château Maisons-Laffitte, just 12 miles outside Paris.

René de Longueil, a wealthy nobleman, built the castle as a royal hunting lodge in the mid-17th century. He hired Mansart, later the architect of Versailles, who designed the central building with pyramidal symmetry that became a benchmark of French classical architecture.

"He spent five minutes staring at it in silence," Ms. Onillon recalled of Mr. Zhang's visit. "Then he said, 'I've seen enough. This is it.' "

Mr. Zhang used the chateau's blueprints and took some 10,000 photos. For the facade, they even found blond Chantilly stone of the type used in the original.

Ultimately, Mr. Zhang decided he wanted something grander. So he returned several times to France. He designed a garden to resemble the one in Versailles, with its statues of Greek mythological figures. Two wings he built to house hotel guests were copies of the royal apartments at Fontainebleau. After a visit to Rome, he added a semicircular colonnade to enclose the courtyard.

Mr. Zhang says he reveled in the details. He furnished his security guards with French-style uniforms complete with capes and kepis. He chose Bacchus as the chateau's artistic theme, making bacchanal the subject of the giant fountain in the garden, frescoes on the facade and the painting covering the dome inside the atrium.

Commercially, it appears to be a hit. Since its formal opening in October, a major fashion show was staged in its gilded ballroom. The Special Olympics held a black-tie fund-raiser there. Even China Central Television, the state's leading propaganda arm, recorded a New Year's Eve special inside the chateau.

When important people visit, Mr. Zhang is driven to the chateau from his office at nearby Baxian Villas in a 12-cylinder Mercedes limousine. He wears his hair in a slick pompadour and smiles in a detached way, affecting the formal cordiality of official protocol.

The big test comes next summer, when Mr. Zhang begins advance sales on his 1,000 upscale homes. The suburbs of northern Beijing are now crowded with high-end developments, some offering American-style single-family houses for $1 million or more. Mr. Zhang says he is confident that his will fetch the highest prices. "No one can match our environment," he said.

Aside from Mr. Zhang himself, perhaps no one knows the surroundings as well as Li Chang. A lifelong resident of Yangge Village, he farmed the land under Chateau Zhang Laffitte for most of his 77 years.

When Mr. Zhang took over the property, an iron fence was erected around the perimeter, barring access to all but authorized workers and guests. Mr. Li is too old be to hired as a worker, but not to pose as one. He sneaks onto the property to chart its dimensions.

He has filled every page in a soft-cloth notebook with tiny black characters and sketches. The chateau sits on 156,895 square feet, triple the size permitted in Mr. Zhang's contract, Mr. Li says. No moat was ever authorized, he claims, but Mr. Zhang's waterway stretches for just over a mile. To level the land and dig the moat, Mr. Zhang removed nearly 24 million cubic feet of dirt, Mr. Li calculated. He called this a enormous loss of fertile soil.

Mr. Li and other villagers argue that Mr. Zhang has reduced the property's usefulness as farmland, violating the agreement that specified it was to be maintained for agriculture and conservation.

"This is a big violation of state land policy," Mr. Li says, growing animated despite the frigid temperatures in his unheated village home. "And it is happening right here in Beijing."

Mr. Zhang disputes Mr. Li's claims and says he has abided by his contract. Mr. Li has no evidence beyond his amateur surveys.

Mr. Li and other villagers appealed to officials in the village, the town, the district, the city and even the national land bureau, so far without eliciting a reply, much less an investigation. They are focused on technical violations they see as likely to draw official scrutiny. But their concerns are broader.

"They took away our land," says Li Youqing, a 68-year-old housewife in Yangge, who is not related to Mr. Li. "That was our only guarantee in life."

Farmland cannot be bought or sold in China, only leased. To be converted to commercial use, it must be reclaimed by the government and rezoned. Officials then oversee the development or sale of the property. Though the terms of such transactions vary, peasants rarely have any say - or share any profits - when their land is developed.

Yangge residents said the only compensation they have received is the $45 monthly stipend Mr. Zhang agreed to pay the elderly, as well as his promise to employ local workers to maintain and farm the estate.

The money helps. But residents say they are poorer than before. They used to have their own grain, vegetables and farm animals. Now they have to buy all their food in market stalls that line the street outside the village.

"We have to pay city prices for our food but still live on farm incomes," Ms. Li said.

The bigger frustration is the spectacle of riches across the moat. The $9.7 million villagers say Mr. Zhang paid to build private villas understated the land's market value, they argue. They say there should have been no special deal for him.

They also claim that the money he paid vanished. Local leaders promised that the money would be used to start companies, shares in which would be distributed to all who had farmed the land. But the villagers say that no such companies exist and that no shares were issued.

Village, township and district land officials declined repeated requests to discuss the chateau.

"Maybe the Central Committee knows what happened to the money," Mr. Li said, making a joke referring to a top decision-making body of the Communist Party. "No one tells us anything."

An Official EmbraceEven when he discusses his chateau, Mr. Zhang's manner is reserved. When asked to discuss China's wealth gap - and the complaints of his neighbors - he turns icy. During an interview in a yellow-and-gold reception room on the top floor of the chateau, he declared that such issues were too sensitive to discuss and that any article mentioning him should include no references to social tensions.

He then offered that he, unlike his neighbors, puts full faith in the government.

"My basic thinking is that, as a private company, I must absolutely embrace the government policies of the day," he said. "Today's leaders have exactly the right kind of thinking about how to handle these issues."

He said local peasants who complained were not representative. He said he would create 600 farming jobs on the estate, which would eventually have an organic vegetable garden and an orchard as well as the vineyard.

"This will be a boon for the farmers, who will make more money than if they tilled the land themselves," he said. "The whole project is exactly in line with Beijing's policy - to maintain the land as green space."

To date, the government appears to have offered strong backing. Beyond converting a large swath of farmland into a semiprotected conservation zone with easements for property development, Changping District made the chateau part of its annual plan. That minimized cumbersome red tape.

His ties reach higher still. After the chateau opened, Mr. Zhang was host to Jia Qingling, a member of the standing committee of the ruling Politburo and the fourth most powerful man in China by rank. Two poster-sized color photos of Mr. Jia touring the castle hang in the wine bar.

Some people, Mr. Zhang said, might misunderstand his project. It is not designed as a playground for the rich, but as a museum for the masses.

"It is for all the Beijing people, including the common people who do not have the opportunity to visit Europe themselves," he said. "I wanted everyone to get a taste of the finest world culture."

On the dusty plain north of Beijing, a businessman has built his own piece of Louis XIV's France.

Little over a decade ago, Zhang Yuchun, a member of the Communist Party, was an official with the Beijing building bureau.

Now he is the proud owner of Chateau Zhang Lafitte, a perfect copy of the Chateau Maisons-Lafitte, the 1642 masterpiece of the architect François Mansart, near Paris.  It is perfect not because it is an exact copy but because it is an improvement on the original. Mr Zhang realised that, though beautiful, Chateau Lafitte was a little small, so he added two wings on each side.  They are modelled on Fontainebleau.

Chateau Zhang Lafitte is a by-product of China's startling economic growth and global attitudes and a symbol of the extremes of wealth to which they have given rise.  Reducing these extremes is now the central goal of the government, according to a top-level party meeting whose conclusions were published last week.

Mr Zhang left the building bureau in the early 1990s to go into property development. Years of neglect and the communist practice of dividing the houses of the wealthy among poor families had led to a dearth of decent homes in China's big cities.

The newly rising capitalist class, party officials and, in Beijing's case, a wave of foreign businessmen needed high quality accommodation.

Mr Zhang's first development, 600 villas in a semi-rural setting on the capital's northern outskirts, sold out, despite what seemed to be exorbitant prices for the time of one million yuan each (£70,000).  Now the houses sell for two or three times that. He decided to plough his profits from that development into something more ambitious. "Europe has a wealthy and ancient architecture," he said. "I felt I had a responsibility to bring it to China."

Mr Zhang, a schoolboy fan of the adventure stories of Alexandre Dumas before such books had to be hidden during the Cultural Revolution, arranged a tour of Europe.  He spent two years and took 10,000 pictures in his quest for inspiration. In Chateau Lafitte, he found it.

"Its style and features were suitable," he said. "I considered Versailles but that was just too big."  He has compensated by borrowing Versailles - gilt, frescoes and tapestries - for much of the interior decor. The Sun King's palace also provides the model for the garden.  To finish it off, the rear courtyard, between the Lafitte and the two Fontainebleaus, is enclosed by a colonnade copied from St Peter's Square in Rome.

The chateau cost £40 million and is being used as a hotel and conference venue. Mr Zhang is spending £26 million more on landscaping, including a golf course and a hot spring resort.  Then he will start work on his next property development, of which all this is to be the centre-piece.

China's 11th Five Year Plan, disclosed last week, was an ambitious blueprint favouring "balanced development": sustainable growth, reduction of inequality and respect for the environment.  President Hu Jintao has identified social inequality and corruption as the biggest threats to one-party rule. He is particularly nervous of widespread unrest over the financial relationship between business and party officials.

Mr Zhang denied that his development was insensitive to the division between rich and poor. "You can't receive high-profile guests in two-star hotels," he said.  "There are all those luxury hotels in Britain and France and there are low-income people there. There should be no discrimination; it is just market economics."

Those economics were on display when The Daily Telegraph visited: preparations were going on for a big function Volvo was laying on for its clients. The previous week, Mercedes held a launch at the chateau.

Mr Zhang has good reasons not to fear a backlash against developers: he has friends in high places.  Occupying pride of place in the chateau's underground bar is a picture of him with a guest enjoying a private wine-tasting.  The visitor can be seen grinning behind the line-up of wine glasses in front of him. His name is Jia Qinglin and he was once secretary of Beijing's municipal government. He is now number four in the Communist Party politburo, the supreme ruling body.

(Xinhua)  Why are Chinese disinclined to show wealth?  February 8, 2005.

Not only are most Chinese inclined to hide their wealth, they even insist they do not have money.

The disinclination to show wealth has been ingrained in the Chinese culture since ancient times. People today are becoming even more private about their income. Psychologists believe this attitude derives from China's thousands of years of cultural tradition, evidenced in proverbs like "a prominent bird gets shot" and "a blossoming tree will be eventually destroyed". They summarize the essence of Chinese social experience, and reflect certain characteristics of Chinese society to some degree.

Exerting a profound influence on Chinese culture for thousands of years, Confucius' doctrine of the Golden Mean promotes a humble, calm way of life. Thus formed the Chinese people's unique psychological quality of disliking self-publicity.

Since Qin Shihuang, the first Qin emperor (248 BC to 206 BC), unified China 2000 years ago, China has mostly been a unified country. In this relatively stable society, there was little competition and no basis for comparison. In this environment, ancient people did not need to reveal their wealth at all.

Chinese people's unwillingness to show wealth also has a physiological reason. Scientists found more dehydrogenates in Chinese livers than westerners' through studies of intoxicated people from various countries. This explains why alcohol poisoning occurs much less frequently in Chinese even though the alcohol content of China's "white spirit" far exceeds that of foreign liquors. The existence of dehydrogenation enzymes in the human brain may have to do with the fact that the Chinese are better at controlling their moods than Westerners.

Cultural traditions and life styles can also have an impact on brain structure.The cultural traditions, conventions, living habits and attitudes that Chinese have inherited through generations cause gradual genic and neural changes. The accumulation of such quantitative changes eventually leads to qualitative changes, or gene mutation. When the mutated genes were inherited, the disinclination towards wealth exposure passed on.

Modern scientific studies find that only the brain's left hemisphere is active in speaking foreign languages made up of alphabets. However, since the Chinese language combines sound and shape, both hemispheres are used in speaking Chinese. Therefore, it is true that the disparity between people's personalities in the East and West has a physiological basis.

Just a couple of years ago, the vegetable patches of Anting, a hamlet west of Shanghai, yielded some of the sweetest spinach this side of the Yangtze River. Now, out of farmers' fields, an entire German-style town has sprouted, its brightly hued gingerbread homes modeled on those of Weimar in Germany. The new town, which will soon house some 30,000 distinctly un-German people, was designed by Albert Speer, son of Adolf Hitler's favorite architect. Forty kilometers away in Songjiang, barefoot migrant workers are building another massive satellite city, this time a vision of ye olde England with tidy Tudor cottages, cobbled paths, a giant castle and a garden maze. In Pujiang, another Shanghai suburb, 100,000 citizens will soon occupy an Italian dreamscape complete with languid canals. In all, at least 500,000 people are expected to live in Shanghai's seven new satellite towns, each designed in the style of a different Western nation. Zhou Jin, an executive currently residing in Shanghai, will soon move into a $67,000 apartment in Anting, where a Volkswagen factory reinforces the German motif. "Life in such an exotic atmosphere will be fun," says Zhou.

In the late 19th century, as the Chinese empire waned, foreigners carved up Shanghai, turning the swampy land into valuable concessions controlled by the French, British, Americans and others. China was humiliated, but the foreigners did leave a picturesque legacy of leafy streets and stuccoed houses that sets Shanghai apart from other Chinese cities. Today, in order to accommodate Shanghai's swelling population and enhance its image as an international gateway, China's largest metropolis is again bringing the West to the East—this time on its own terms. Shanghai's seven satellite cities will draw so much inspiration from Britain, Italy, Germany, Spain, Sweden, Holland and Canada that one urban planning official announced in a 2002 press circular that "foreign visitors will not be able to tell where Europe ends and China begins."

But critics are sniping that building Western-themed towns on Shanghai's outskirts is impractical and insensitive in a country that once served as a stomping ground for foreign imperialists. Granted, some of the towns have taken pains to modify their foreign themes with Chinese characteristics. In Pujiang, for instance, Italian architectural firm Gregotti Associati International has adopted everything from feng shui philosophy for window placement to extra bedrooms for the parents who often live with newlywed couples. But a Disneyland syndrome affects other suburbs. At Thames Town, one of the English-style developments that make up Songjiang New Town, an ad campaign advises that anyone fond of steeplechasing, Premier League soccer and the Beatles should consider joining the 8,000 fortunate folks who will ultimately live in this housing complex. Naturally, Thames Town will have a British exhibition hall where planners envision screening a James Bond film festival, and a church where, says one promotional poster, "you can adopt exotic marriage customs in which you exchange vows in front of a pastor."

With a minimum price of $490,000 for a villa in Thames Town—more spacious digs go for $669,000—Songjiang New Town will be out of reach for many of the lower- and middle-class Shanghai residents whose housing woes these satellite towns were originally intended to address. More than 3 million migrant workers have flooded into Shanghai, and as the city center is torn up for office high-rises, 226,000 people were forced to relocate to suburbia in 2003. But a property bubble has prevented many citizens from finding affordable housing near Shanghai. "Of course, the developers of these satellite towns want to build luxury homes that they can make a lot of money on," says Mao Qizhi, deputy director of the Institute of Architectural and Urban Studies at Tsinghua University in Beijing. "So you need decision makers in the Shanghai government to say, 'No, we have to take care of the interests of the majority of the people, who aren't rich.' So far, that hasn't really happened."

Near Italian-themed Pujiang, a group of farmers eyeing the airy granite-and-glass concoction that will serve as the new town hall, exhibition center and restaurant arcade grumbles that there's no way they will be able to afford to live in their own hometown. But inside the building, Yue Xing, president of Shanghai Highpower-Oct Investment Ltd., one of the developers of Pujiang New Town, defends his urban vision: "We are not judging [future residents] by how much money they have but by their commitment to enjoying a better quality of life. We have to think about how to make Shanghai a green, livable place." Yue notes that his plan integrates commercial and housing areas to avoid creating residential ghettos—a common criticism of satellite towns—and that high-tech parks nearby will send a stream of scientists and engineers to live in Pujiang, thereby spawning a self-sustaining environment independent of Shanghai. The development also offers multi-income housing, in which the cheapest apartment will cost only $84,000—not bad, though hardly affordable for most people in a city where the average annual income is about $2,700.

Other planned communities, like the Spanish and Canadian ones, are stranded in the countryside with little industry to support them as organic communities. The world is littered with failed cities, where urban planners overlooked residents' needs and incomes. In the Brazilian capital of Brasilia, for instance, the sprawling urban center was designed for easy car transport but now teems with slum dwellers too poor to afford even bicycles. As Shanghai tries to address the needs of its own multiplying population, some are worried that the same mistakes could be replicated in the city's planned satellite towns. "Each of these [foreign-themed] towns wants to follow the model of quick development," says Zheng Shilong, a professor at Shanghai's Tongji University, who helped advise the municipal government on the formation of these new suburbs. "But just building an expensive residential development won't make an entire community come together." What's more, because Shanghai is a trendsetter for China, other mainland cities might blindly follow, littering the Chinese interior with gargantuan Paris Towns. "If other cities copy Shanghai on this, we could have a disaster on our hands," says Tsinghua University's Mao. "This is not the path that China's urbanization should be taking."

Even in Shanghai, most urban planners were against the foreign-themed project when it surfaced five years ago. "None of us supported the idea," says one municipal advisory-committee member. "But we weren't called in to criticize. We were called in to make the proposal work." The idea, after all, was a pet project of Huang Ju, Shanghai's former Communist Party secretary. But since dreaming up his satellite scheme back in 2000, Huang has moved on to Beijing, where he is now a member of China's Cabinet.

Today, in Shanghai, few in government seem eager to acknowledge this massive suburban undertaking. Over the past two months, three municipal departments declined to comment on the project, a curious silence in a city that is usually keen to burnish its international reputation with its latest, hippest urban scheme. Local papers, which tend to give property developments breathless coverage, have also been remarkably muted in recent months. Ironically, the developers of those foreign-styled suburbs that are already finished report high sales rates for what are, after all, some of Shanghai's most comfortable neighborhoods, even if some of them feel as charmless and inauthentic as an oversize miniature-golf course. But as the upper echelons move into their plush digs, the rest of the city is left to wonder why there aren't enough satellite towns suited for them. In the end, Shanghai's concession to an international future may prove as politically unpopular as its foreign concessions of the past.

(The Guardian)  China's new rich learn to flaunt it.  By Jonathan Watts.  January 14, 2006.

For decades it was a crime punishable by imprisonment or death. Then it became a mere social taboo to be furtively practised away from disapproving eyes. But now, being wealthy is a cause for celebration, prompting thousands of Chinese millionaires to come out of the closet.

More than 20 years after Deng Xiaoping pronounced the end of communism with the phrase "to be rich is glorious", a generation of self-made tycoons is starting to have the time, the money and the confidence to flaunt their good fortune. They were evident at the Best of the Best gala dinner in Shanghai, where 20 of the wealthiest entrepreneurs joined hundreds of luxury goods providers at an awards ceremony for those judged best able to satisfy the country's most expensive tastes.

Quaffing cognac and champagne in the sumptuous setting of the Pudong Shangri La ballroom, the big players of the world's fastest growing economy handed out honours to salesmen from leading global brands.

Among the guests were Yan Jiehe, a construction mogul and second richest man in China with a fortune estimated at £850m, and Timothy Chen, an internet game pioneer, reportedly worth £790m. They and 589 people with annual incomes in excess of 10m yuan (£700,000) voted on their favourite brands - all names familiar in the west, but none of which they were likely to have heard of growing up in Mao Zedong's China.

Their choices offered a snapshot of the huge change that the country has undergone - particularly at the top of the income scale. Among the prizes were favourite sports car: Ferrari; favourite yacht: Princess; best fashion label: Giorgio Armani; best cigar: Davidoff; favourite auction house: Christie's.

Among the few domestic products to get the seal of approval were the liquor maker Wuliangye, search engine Baidu and the 21st Century Business Herald, which was voted best newspaper.

Along with the awards came the release of a lifestyle survey, which found that the favourite leisure pursuit of this affluent minority is travel, with Australia, France and Hawaii the most popular destinations (Britain was sixth).

Golf, unheard of in China 20 years ago, was third on the list. Wine-tasting was eighth - ahead of spending time with a spouse or raising children - cigar-smoking 12th and, bizarrely, parachuting 13th.

Critics have pointed to such idiosyncratic results as a sign of the unreliability of rich lists in China. But what is most remarkable is that such surveys can be carried out at all in a country still ruled by a nominally communist government.

When Rupert Hoogewerf, the founder of Hurun Report, which organised the awards ceremony, released his first Chinese fortune list in 1999 he was widely criticised. In the public eye being rich was associated with corruption. Few people wanted to cooperate and many of the people he outed as wealthy were targeted by tax officials, the media, and even kidnappers.

Now, however, people are more comfortable with their money, he said. "There has been a revolution in the image of wealth. Twenty years ago it was a dirty word. Now it is a sign of success."

He added: "The first generation didn't want to show they had money. They might buy a fine house, a nice watch and 20 cars, but they would not reveal them in public. The cars would stay in the garage. But today the second generation and successful young professionals are more likely to flaunt what they have."

Cartier's biggest single sale in China last year was of a diamond necklace valued at £1.5m, contributing to a 40% surge in sales. Cartier's east China regional manager, Josephine Chien, one of the guests at the banquet, said her firm had two boutiques in China in 2004 but now has 11. By 2010 this will have increased to almost 30 and China will have overtaken Japan as the company's second biggest market.

"There are a lot of people who have become rich all of a sudden and they like to wear things that get them recognition. They want to show people they have made it," she said.

It is not the same everywhere. While rich people in wealthy eastern regions such as Shanghai, Beijing, Guangdong and Zhejiang are happy to talk about their fortunes, Mr Hoogewerf said, it is harder to glean information from their counterparts in western provinces, where tens of millions of people are still living on less than a dollar a day.

But the number of rich even in those areas is growing apace - and attracting big international firms. "We see a very rapid increase in affluence," said Mabel Wong McCormick of drinks firm Moët Hennessy. "There is a very obvious need for high-end products and it is spreading. Five years ago we focused only on coastal areas, but now we are moving inland and to the north - not just in provincial capitals, but second and third-tier cities."

With income disparities widening, some question whether the publication of rich lists is good for social stability. At a press conference to announce the results of the lifestyle survey, a local journalist asked: "Don't you think this will make ordinary people hate the rich?" The hundreds of wealthy people who contributed anonymously to the research appear to accept Mr Hoogewerf's argument that openness will ease suspicion rather than foster resentment. Most have first hand experience of what it is like to be poor.

"Perhaps some people are envious or angry, but I have never really thought about it. I'm a businessman," said Yu Pang Lin, a former rickshaw driver who now uses a large chunk of the fortune he has made from the Hilton Group to pay for ambulances and cataract operations in China's poorest regions. "When I was young we often didn't have enough to eat. Now I have huge assets, but I don't think about it much. I only see it in terms of how many people I can help."

Such acts of public benevolence and transparency still appear to be the exception rather than the rule. It is yet to be seen whether the new generation of self-made millionaires will be more generous as well as more confident.