March 17,2011

China's New Rich: A "Coal Boss" Pays RMB10mn for a Dog "for Fun"

By CSC staff,Shanghai

This is a top-ranked news on China in Google News today. A "coal boss" in Shanxi recently bought a Red Tibetan Mastiff for RMB10mn (US$1.5mn). Keeping one of the Tibetan Mastiffs has become a highly-prized status symbol for China's new rich like coal bosses. The coal boss has named his pet "Big Splash" and hired several breeders looking after it.

This ostentatious consumption is more about how China's new riches squander their windfalls. Bill Gates or Warren Buffet surely has much more money, but they might believe that spending on charity could bring more happiness than raising expensive dogs. The windfalls from natural resources (and some IPOs) could explain why properties in Beijing, Shanghai, Hainan and even Hong Kong are so expensive. It can also explain some "ghost cities" like Ordos of Inner Mongolia. But one fact might alleviate some of your concerns. This coal boss use his own money, instead of credit from banks, to buy the US$1.5mn puppy, so this ostentatious consumption may not lead to banking crisis.

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