When President Xi Jinping unveiled the “China Dream” as the ideological platform for the nation in his inauguration speech in March, he advocated for the realization of “a prosperous and strong country, the rejuvenation of the nation and the well-being of the people.” According to the state-run news agency Xinhua, this China Dream means that all workers should “combine their personal dreams, such as their desires to achieve their aims or family's happiness, with the national dream and fulfill their obligations to the country.”

However, the American Dream has long percolated into the hearts and souls of the Chinese who now aspire to their own white-picket-fenced home, a car, to send their child to university and to travel abroad.

In his speech, Xi advocated in his speech for the realization of “a prosperous and strong country, the rejuvenation of the nation and the well-being of the people.” Yet herein lies the key contradiction at the heart of this ostensibly nationalistic China Dream: on the one hand, China’s narrative of growth has been a ‘rags to riches’ tale more reminiscent of the American Dream. Ever since Deng Xiaoping memorably declared in 1989 that “to get rich is glorious,” the Chinese consumer taken that mantra as their own and absorbed much of the individualist work ethic and capitalist consumerist practices long associated with the American dream.

The Chinese relationship with luxury goods, to cite but one example, is a fascinating tale of this Chinese-American Dream. Since Deng’s initiation of economic liberalization in 1989, an enlarged, and enriched middle to upper class with high buying power has been responsible for the rising consumption of luxury goods ranging from designer jewelry and bags to luxury cars and tobacco. A distinct flavor of optimistic hedonism has gained currency amongst the wealthy and the aspiring wealthy, emerging from the traditional cosmopolitan centers such as Shanghai and Beijing and, more recently, from the smaller second and third tier cities such as the Jiangxi, Anhui and Hebei provinces.

China has just recently become the greatest consumer of luxury goods in the world, surpassing the United States and projecting to constitute a third of the global luxury market by 2015, according to recent studies. Luxury brands are now absorbed as status symbols in a country that has long been obsessed with ‘showing face.’ In pre-1989 China, this reputation obsession took the form of a Communist firebrand of asceticism and abstinence, where any exultant show of wealth was denounced and stamped out. Times have changed: China’s predisposition for ‘showing face’ has shifted into ‘showing off,’ thanks to high optimism about future incomes and the economic situation of the nation.

There is a dark side: this has led to widespread corruption in business and political affairs: gift giving amongst public officials, for instance, is frequent. The recent trial of disgraced former party official, Bo Xilai has involved, among other things, the accusation of accepting bribes from Plastics Industry tycoon Xu Ming in the form of expensive gifts such as designer watches and extravagant overseas trips for Bo’s family. President Xi Jinping reacted to this systemic corruption by launching a ban of gift-giving in all governmental departments in 2012 as an attempt to revive Maoist austerity and asceticism.

Understanding the Chinese relationship with the luxury industry, or more precisely, why the Chinese buy into the American Dream, reveals the perils that lie ahead for Xi’s dreams of a Chinese spirit. What is more problematic for China and indeed President Xi is whether the gluttonous practice that at it’s worst led to the 2008 Global Financial Crisis and the European Sovereign Debt Crisis will similarly unwind the country’s productive work ethic and thrift – which has been the bedrock of its incredible economic rise. The Chinese risk adopting the same kind of spendthrift practices that debilitated the Western economies and capped economic growth due to unsustainable levels of debt.

From a free-market perspective, this kind of consumerism should lead to a stronger impetus to succeed through hard work. However, this presupposes that China never had its own kind of cultural work ethic to start off with. In fact, instead of a liberalistic, or ‘Protestant’ work ethic, it had its own, rising from a fusion of Communist and Confucian philosophy. Where one celebrates individualism and ‘egoism’ and seems to say, ‘work hard and reap the rewards,’ the other seeks to bolster the collective state, saying instead ‘work hard and China as a whole will reap the benefits.’ This view also neglects the equally strong impetus to spend, particularly amongst the growing middle class, which in a country long accustomed to ‘saving’ is highly problematic.

As never before, Western practices of market liberalism have changed China’s identity, to the extent that intense emotional nationalism can no longer be an effective sticking point for the Chinese people. Instead, a pragmatic and highly economic-driven model to collectively better the livelihoods of the common people is what the people seem to desire more. Xinghua newspaper, the mouthpiece of the Chinese government, declared recently that “only by ensuring workers live a dignified life can the country maintain a healthy social order and the foundation for realizing the "Chinese dream" be consolidated.” China, however, needs to reconcile the two contradictory elements to its current dream to maintain not only economic efficiency but also a level of political stability and legitimacy over time.