By Zhu Yuan

I wanted to throw a pair of trousers away because the leg bottoms began to fray. But my wife hesitated because she believed the rest of it was still good.

To throw the trousers away or keep wearing them was not the question.

Except for my growing desire to wear new ones, I believed manufacturers of trousers would go bankrupt if most of us kept patching them up to get some more life out of them. For the development and sustainability of the garment industry, we need to throw away clothes that are either out of fashion or look worn out.

My wife's view is not unreasonable. She believes it is a virtue to be frugal and she never throws away anything that is still usable.

Of course, no one denies that thriftiness is not a virtue. But if we all maintain a thrifty lifestyle as we did three decades ago when we would wear a pair of trousers for as many as 10 years, most current producers of consumer goods would quite likely close down for lack of demand.

And, that could trigger an economic crisis. But where the nature of this current financial crisis is concerned, it is the other way round. It is a crisis caused by the shift of wealth from the future to the present.

In other words, financial institutions on Wall Street have too many bad debts and many Americans have too large a deficit in their personal accounts. They have spent their savings and the money that should have been kept aside for the next generation.

I am no expert on economics and finance. But it is common sense that your sleeve should never be longer than your hand when managing a family. And the same should be true with the financial management of a city or a nation no matter how complicated it is.

I still remember that one of my neighbors who loved drinking and eating too much. That was more than 30 years ago. He was well known in the neighborhood for being debt-ridden all the time and living from hand to mouth.

As a result, his children wore shabby clothes and his home was poorly furnished.

In comparison, those who earned the same salary as my neighbor always spent according to their income, and therefore lived a much better life.

I sometimes think if that neighbor of mine were still alive today, he would have taken advantage of the credit card. But he would undoubtedly have ended up with a bad credit rating and bankruptcy.

I remember Chinese people were once sneered at for putting a large proportion of what they earned into their savings accounts. Some even believed that the high rate of saving deposits was to blame for the country's underdeveloped economy.

It is reasonable to believe to a certain extent consumption stimulates production. Yet, it does not necessarily mean that we should consume beyond our means. Nor does it mean we should waste energy and resources only for the sake of development.

Yes, we must maintain a certain economic growth rate to provide enough jobs. It is particularly so for such a populous country as China. But the consumption we encourage in our urban and rural areas should be different from what is defined in the West, particularly, the United States.

Our consumption should never be the spending of borrowed money from banks. Nor should it be a single person driving a sport utility vehicle bought on loans from a bank, or a family of three living in a house with five or six bedrooms.

That is a waste of resources, especially for a country with one-fifth of the world's population but with per capita resources of coal and water only 50 percent of the world's average and other resources also far below the world average.

I hate to demolish old buildings still in good condition only for the sake of building new ones. There have been repeated reports of demolition of buildings less than 20 years old to make room for new ones. I have witnessed a three-year-old road of only a few miles, being constantly dug up and repaved.

All these projects have certainly created jobs. But the way the money was spent is similar to that of my neighbor, who cared only about squandering his income but never taking into consideration the future of his family. My neighbor left his children nothing but bad debts, a heavy burden.

When the pressure is mounting for China to maintain its economic growth rate by expanding domestic consumption, we must be aware that we should never cultivate a culture that worships nothing but consumption.

As our government has launched a huge fiscal stimulus package, we must be vigilant against the waste of money on unnecessary projects.

In spending money, we should not dispense with thrift for the sake of new thrills and hope encompassed in hype. It is more important to make sure that every penny is spent in the right place and in the right manner, rather than how much money has been spent and how many jobs have been created.

(China Daily November 15, 2008)