You may have missed the news this week that Ferrari has recalled all its 458 Italia supercar because five of them have recently burst into flames.
You are unlikely to have been personally concerned: The Italian company has made only 1,248 of these vehicles, selling them to the likes of Eric Clapton.
What caught my eye about the story was that two of the five flaming Ferraris worldwide caught fire in China.
That’s the sort of factoid that gives meaning to the striking statistics one comes across from time to time about Chinese incomes – the ones that say China has 64 billionaires, more than any other country except the United States (according to Forbes’ 2010 rich list), or that China’s Gini coefficient, measuring income inequality, is 0.47, one of the highest in the world (according to the World Bank.)
Ferrari, whose sleek showroom in downtown Beijing attracts a lot of goggle-eyed passers-by taking pictures through the window on their mobile phones, sold 212 cars in China in 2008 according to company figures. The firm says it hopes to make China one of its top six markets within a few years.
The 458 Italia, which apparently has problems with combustible glue, costs $550,000 in China – more than twice as much as in the US, because of taxes. It would take the average Chinese urban citizen 152 years to earn that much money.
But there may well be even more Chinese in the market for this sort of car – or the Lamborghinis and Maseratis that you sometimes see growling impressively outside Beijing’s smartest hotels – than the official figures suggest.
A report on undeclared and often illegal “gray income,” published last month by an independent economic think here, estimated that China’s rich may be hiding as much as $1.4 trillion – equivalent to one-third of the country’s GDP.
The richest 10 percent of Chinese control about 62 percent of that hidden income, a study by the China Reform Foundation concluded. The average per capita income of that same 10 percent is 65 times higher than the bottom 10 percent of society, the Credit Suisse-commissioned report estimated. Officially the disparity is 23 to 1.
The two unlucky Chinese Ferrari owners whose pride and joy went up in smoke could probably afford to shrug and buy another one. But they won’t have to. Ferrari has promised to give them replacements for free.