I know several lavish spenders. They've bought their second big house and made it their weekend homes. This probably explains why so many homes in gated communities are mostly dark at night. Now they are upgrading to more expensive cars, like a Porche SUVs, which sells for 2 million yuan (293,000).

Isn't it their own business if they want to buy a nicer car or a bigger house? I do not think so because the spending patterns of the elites have a cascading effect throughout society. In other words, people try to keep up with the Joneses, or the Wangs, by emulating behaviors of those in their own or higher social group.

I have a friend who is a Chinese upper middle-class professional. He lives with his wife and young son in a paid-up three-bedroom home worth 2.5 million yuan, and drives a Chrysler Sebring at a cost of about 200,000 yuan. He was thinking of quitting his job so he could pursue his passion for writing, when the family had saved enough for retirement and his son's education.

Life seemed comfortable and relaxed, until his wife has recently begun to dream of having a country house with a garden so she could grow pesticide-free organic vegetables for their toddler.

Many friends have already bought bigger second homes. She has also been eyeing a BMW SUV, after one of her colleagues was seen driven to work by her rich husband in a sleek Porsche Cayenne.

My friend says he would probably have to work harder and longer hours because of the new expenditures. His early retirement plan has also gone up in smoke.

The material criteria for people in lower or middle-classes are also being raised. During the National Day holiday a report in a local newspaper urged young people to buy a Mercedes-Benz C class with a sticker price of about 300,000 yuan not including tax. "If you already make more than 200,000 yuan a year, you should buy a Mercedes before you turn 30, as a sign of the beginning of their successful career," it said.

Foreign research shows that intense competition for social status doesn't make one happy, because it leads to housing price hikes, higher personal bankruptcy rates, and a higher incidence of divorce.

China's new bourgeoisie is not spared the plight.

And the rat race for status through conspicuous spending can go down the social ladder to the very bottom. For example, the city poor who live a day-to-day existence will try to give specific amount of cash presents on weddings following the social norm, because they don't want friends or neighbors to think they are poor.

It's a fact that while some Chinese are flush with money, most people are still poor. Besides being wasteful, luxury spending spree is bad for social harmony because it makes poor people feel less successful and become more aware of the social and economic inequalities, further widening the rift between rich and poor.

Unfortunately, some government officials have also contributed to the extravagant and self-indulgent social climate.

Amid widespread corruption, people are resigned to executive extravagance and have find media reports of the luxury lifestyle of corrupt officials both shocking and entertaining.

There seems no immediate solution to the spending spree as China experiences its own Gilded Age and the government is taking all measures to promote domestic consumption.

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