Vincent Thian / AP

A worker prepares to start business for the day at a traditional food stall in Beijing. Over the past two decades, incomes have gone up fourfold in the world's most populous country.

Sometimes more money just buys more unhappiness. Take China, for example.

Everyone assumed that people would get happier as their wallets got fatter. But a new study shows that the opposite occurred, at least for those at the lower end of the income spectrum.

Despite record economic growth over the past two decades – resulting in more than fourfold increase in income and spending – Chinese people overall have become less satisfied with life, according to the study published in the Proceedings of the National Academy of Sciences.

“Incomes really did go up – even among the poorest segment,” says the study’s lead author, Richard A. Easterlin, university professor and professor of economics at the University of Southern California. “The staggering thing is that despite that, overall satisfaction failed to go up.”

Not only did satisfaction fail to go up, it fell like a rock in the early 1990s. Satisfaction slowly climbed back up after that but never to the point where it was at the beginning of China’s economic transformation.

Easterlin and his colleagues looked at two decades of surveys that included questions about life satisfaction. In 1990, those surveys showed that a large majority of the Chinese people, across all age, education and income levels, reported high levels of life satisfaction. A full 65 percent of those in the poorest income bracket reported high satisfaction as compared to 68 percent of the most wealthy.

By 2010, just 42 percent of Chinese in the lowest income bracket reported high satisfaction, compared with 71 percent of the most wealthy.

"Although a precise comparison over the full study period is not possible, there appears to be no increase and perhaps some overall decline in life satisfaction," the study says.

While many people believe economic growth leads to rising happiness, an entire field of economics has shown that happiness and wealth are not always closely correlated.

Part of the explanation for the unhappiness in China may lie in big societal changes that came along with the country's amazing economic boom.

“Here we have people who were basically secure about their jobs, their income and their retirement, and that all goes by the board," Eaterlin said. "So even though incomes got better, overall feelings of anxiety became much more severe and outweighed the material improvements.”

Beyond this, health care was no longer a right. As the system became privatized, fewer could afford doctors’ bills. So along with lowered satisfaction, people were reporting poorer health.

Easterlin sees this as proof that the road to happiness requires more than just bigger paychecks – especially if everyone is getting a bump in pay.

China might make its people happier if the country repaired some of its damaged safety nets, he argues.

But even with that, there might still be plenty of dissatisfaction.

The problem may simply be that people are more concerned about money now and more focused on “keep up with the Jaos,” Easterlin says.

Odd Andersen / AFP - Getty Images

Volkswagen Chairman Martin Winterkorn, left, German Chancellor Angela Merkel, middle and China's Prime Minister Wen Jiabao. Earlier this year, VW signed a contract for a new plant in Xinjiang.

Despite an unexpected slowdown in sales earlier this year, the Chinese auto market is expected to hit an industry-record 20 million vehicles this year – prompting manufacturers to announce billions of dollars in new factory investments designed to keep up with booming demand.

Ford will invest nearly $1 billion to double its capacity in the Chinese market. Nissan needs to support plans that would boost its own sales from 1.2 million units this year to 2 million by mid-decade. And then there’s Volkswagen, second only to General Motors as a Chinese powerhouse. VW will spend $225 million on a new factory in Urumqi.

What’s unusual about the VW investment is that it is targeting the western province of Xinjiang, far from the established Chinese automotive manufacturing center, which stretches along the nation’s Pacific coast. That includes cities such as Shanghai and Beijing that have also provided the bulk of demand to support the decade-long Chinese automotive boom.

Xinjiang, by contrast, is a provincial backwater, a land of sparse, high mountain deserts that has barely felt the impact of China’s economic revolution. So why would Volkswagen want to build a plant there?

While the German maker won’t confirm it, there was likely at least some gentle pressure from the Chinese government, which is looking to spread the wealth, so to speak, bringing economic improvement to the rest of the country. 

And automotive industry leaders generally agree with that strategy as a way to further expand their market. That’s especially true for makers, like Ford, who were slow to target China. 

The second largest of Detroit’s makers, Ford is little more than an also-ran in China with sales of a little more than 600,000 vehicles last year – compared to nearly 2.3 million for GM. Ford’s own new plant in Hangzhou is a bit off the beaten path.  And the maker is betting that much of the demand will come from first-time buyers “in the new markets in Western China,” said Joe Hinrichs, head of Ford’s Asia, Pacific and Africa operations during an interview at the Beijing Motor Show.

The disparity between the booming Pacific Coast and the rest of China is enormous, especially when it comes to the automotive market, said Yale Zhang, managing director of the consulting firm Automotive Foresight (Shanghai).

In so-called Tier I cities, such as Shanghai and Beijing, car ownership is now approaching levels seen in Japan, if not the United States – anywhere from 250 to 500 cars for every 1,000 residents. That boom is creating chaos on the streets, leading some cities to attempt to curb car purchases.  Beijing last year enacted a registration lottery. Only those who win one can buy a car.

“Beijing’s traffic, cannot be sustained at the current level” of growth, Zhang explained.

In cities like Urumqi, however, there’s not much more traffic than a decade ago, when the Chinese automotive industry first got going. But building up a market won’t be easy, the analyst cautioned, noting that income is also substantially lower when you move off the fertile Pacific Coast.

So manufacturers targeting central and western China are focusing on smaller and markedly less expensive vehicles than those sold in the east. GM and its Chinese partners, Shanghai-based SAIC and Liuzhou’s Wuling, have created an entirely new brand, dubbed Baojun – or “Treasured Horse” – specifically to go after the lower-tier cities.

The new brand -- and similar new competitors, such as the Nissan/Dongfeng joint venture called Venucia -- is largely focused on products in the $5,000 to $10,000 range. That’s apparently connecting with wannabe Chinese motorists. Within its first few months on the market, Baojun already had a 2 percent share of its market segment. So far this year that has more than quadrupled.

While so-called Tier III, IV and V cities will likely be slower to go mobile they still hold out significant promise according to Kevin Wales, head of GM’s Chinese operations. By various estimates, he said, there are somewhere between 200 and 300 cities in China with populations of more than 1 million. Even a modest increase in car sales in those new regions would help maintain the Chinese automotive boom.

While the days of 20, 40, even 60 percent annual growth are likely over, Automotive Forecast’s Zhang still anticipates the overall market will increase between 6 percent and 12 percent in 2012 – figures most analysts and industry planners agree with. With demand clearly on the rise after the first-quarter slowdown, Chinese motorists are all but certain to snap up at least 20 million vehicles this year.

Nissan CEO Carlos Ghosn is among the many experts forecasting demand will reach at least 30 million by decade's end. But that will require some significant changes in the Chinese economy and its automotive market – with the fruits of the last decade spreading deeper and deeper into the countryside.

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Jason Lee / Reuters

GM likely would have discontinued the Buick brand if not for its success in China.

At first glance, it might look like a conventional BMW 3-Series sedan, but a closer inspection reveals it’s been stretched 11 centimeters -- about 4 inches for metrically challenged Americans -- almost all of that going to rear-seat occupants.

For now, the BMW 335Li, like the long-wheelbase Infiniti M35hL and other “stretch” models, are targeted specifically for China, where a sizable number of car buyers prefer to be chauffeured, riding in the back seat.  But going forward, many manufacturers say, the products they are now designing for China will have broader applications in other markets.

“Automakers like to follow the money,” said Joe Hinrichs, president of Asia, Pacific and African operations at Ford.  And more and more of their revenues are being derived from China -- now the world’s largest national market.  Barely a decade ago, the region he represents accounted for barely a sixth of global auto sales.  It’s now a third and will soon generate half. China alone is forecast to see auto sales rise to 30 million units by 2020, 80 percent above the previous U.S. record.

“So if two of the largest markets in the world (when India is included) will be in Asia, you can understand how much those markets will play in the development of our next-generation vehicles," Hinrichs said in a conversation at the Beijing Motor Show.

One already sees the Chinese touch at Buick.  The century-old brand was rapidly fading away until General Motors began selling them in China a decade ago.  In fact, GM design chief Ed Welburn has acknowledged that were it not for strong Chinese demand, Buick likely would have been abandoned with four of the company’s other brands during its 2009 bankruptcy.

Instead, GM’s latest products clearly reflect the desire by China’s up-market buyers for more spacious and elegant vehicles.  And ironically, models like the LaCrosse are clicking with U.S. consumers. Buick is now one of the fastest-growing brands in the U.S.

Automakers have come to embrace globalization to varying degrees.  It is a key attribute for Ford, where CEO Alan Mulally is pressing his One Ford strategy, with the company migrating to platforms that can be shared worldwide with relatively little change.  The new Ford Fusion is nearly identical to Europe’s new Mondeo, and the compact Escape crossover is the same as the new Kuga on display at this week’s Beijing show.

Ford is even migrating to a more global Mustang, which reportedly will share some of the underlying components -- and design features -- of the popular Evos concept Ford revealed at last autumn’s Frankfurt Motor Show. 

Of course, the challenge is making sure buyers in one market don’t feel they’re being slighted by another.  The new pony car “will have to look and feel like a Mustang,” hinted Ford senior designer Martin Smith, who like other executives is otherwise tight-lipped about the next Mustang program.

Industry officials stress that no single market will dominate automotive design, and that American and European consumers will continue to be probed and polled by product planners.  “But you don’t design a car today without heavily considering the Chinese market," said Andy Palmer, Nissan Motor Co.’s executive vice president.

The influence of China could be subtle and actually quite welcome in the U.S., suggested Palmer, who runs Nissan’s Infiniti division. He said the automotive tastes of Chinese motorists are actually more in line with the U.S. than are those of European auto buyers, who prefer small, smaller and smallest products, with a small majority now powered by diesels.

Palmer believes that, like Buick, the Infiniti brand could benefit from this global shift in the automotive industry.  The brand has long been an afterthought in the luxury segment, but it is shifting strategy.  Instead of trying to directly compete with European leaders like BMW and Mercedes-Benz, Infiniti’s goal is to now “build a reputation for cool Asian luxury,” with the emphasis on China, according to Palmer.

Notably, the Nissan division is about to move its brand headquarters to Hong Kong.  Just five years ago, it might have been more likely to move to the U.S., long the world’s biggest luxury market. 

China could have an even bigger impact on global product development if government leaders maintain their plans to promote electrification, primarily in the form of plug-in hybrids and battery-electric vehicles, added Nissan CEO Carlos Ghosn.

The Nissan executive has been among the most optimistic proponents of battery propulsion, predicting there could be 10 million battery and hybrid electirc vehicles sold annually by 2020.  The Chinese program would itself push 5 million onto the market.

But there’s at least one big difference between China and Western markets.  It’s much more of a command-and-control economy and could mandate battery power even if motorists remain reluctant.  On the other hand, if China takes the lead in electric propulsion that could put it in an even better position to influence what happens in the rest of the world if battery power ultimately does take off.



Diego Azubel / EPA

A model poses next to a Lexus ES 300h at the 2012 Beijing International Automotive Exhibition in Beijing on April 24.

How Hwee Young / EPA

A model poses next to a Mini Cooper at the 2012 Beijing International Automotive Exhibition in China on April 24.

                           

Jason Lee / Reuters

A model stands next to a Mercedes-Benz Concept Style Coupe at Auto China 2012 in Beijing on April 24.

China's leading car show opened in Beijing on April 23 with automakers from around the world presenting more than a thousand car models. The automobile exhibition, also known as Auto China Show 2012, will run until May 2. Associated Press reports that automakers are looking to China to drive revenue amid weakness in the United States and Europe. But explosive sales growth that hit 35 percent in 2010 fell to just 2 percent in the first quarter of this year.

Related MSNBC.com stories on Auto China 2012

Autos on MSNBC.com

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Vincent Thian / AP

The latest BMW concept vehicle i8 Spyder is on display during the 2012 Beijing International Automotive Exhibition in Chinca on April 24.

Alexander F. Yuan / AP

A Fiat 500C is on display at the 2012 Beijing International Automotive Exhibition in Beijing on April 24.

Alexander F. Yuan / AP

A Cadillac CIEL is on display at the 2012 Beijing International Automotive Exhibition on April 24 in Beijing, China.

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VW already has an established manufacturing base in first-tier Pacific Coast Chinese cities, such as Shanghai.

It’s a huge week for the Chinese auto industry with most of the headlines emerging from the biennial Beijing Motor Show — but at least one major story is coming from halfway around the world.

During a meeting at corporate headquarters in Wolfsburg, Germany, Volkswagen AG officials revealed to Chinese Premier Wen Jiabao and German Chancellor Dr. Angela Merkel plans for a major expansion in the automaker’s long-running partnership with China First Automobile Group.  That includes a new plant in Urumqi, capital of the western province of Xinjiang.

That in itself is significant, supporting Chinese government efforts to spread the country’s economic boom and — in turn — create new markets for automakers like VW.

The Detroit Bureau: Bentley celebrates a royal milestone in China

“A 30-year success story unites Volkswagen and China,” Volkswagen AG CEO Dr. Martin Winterkorn told the visiting officials. “As a pioneer of the Chinese automotive industry we gave important momentum to China’s industrial development and to German-Sino economic relations. Together with our partners we will now carry this pioneering spirit into Western China as well.”

VW is just one of many automakers announcing new factory plans.  In recent days, an assortment of manufacturers have revealed plans to step up production to keep up with growing demand, including Ford, which plans to double its current capacity to 1.2 million units annually by mid-decade.

Despite a recent slowdown that most industry officials see as temporary, the Chinese industry is expected to maintain a growth rate of between 6 percent and 10 percent during the coming years and could reach 30 million annual sales by decade’s end, according to automotive leaders including Nissan CEO Carlos Ghosn.

As one of the first foreign manufacturers to enter the Chinese market, and long one of the region’s sales leaders, VW is struggling to keep ahead of its rivals — though it is now playing catch-up to another early entrant, General Motors. GM was the first maker to reach the 2.5 million annual sales mark in China last year and now hopes to reach 5 million shortly after mid-decade.

The Detroit Bureau: Chinese dealer profits tumbling, J.D. Power warns

VW, meanwhile, urgently counts on China to generate the added sales that would be needed for its own 2018 goal of becoming the worldwide industry sales leader.  It has promised to be producing and selling 10 million vehicles annually by then.

The People’s Republic is already the German maker’s largest national market, generating demand for 2.26 million of its products last year. And despite the recent industry slowdown, the maker saw its own sales surge 15.6 percent — 633,000 vehicles — during the first three months of the year.

As all foreign makers, it is required under law to pair up with a Chinese domestic maker and now has two separate joint ventures going — collectively employing 50,000 workers — including the original one with China First, also known as First Automobile Works, or FAW.

What’s particularly notable about the latest venture is not its size.  At an investment of 170 million high-Euros, or $225 million, with a planned annual output of 50,000, it is modest, at best.

The Detroit Bureau: Infinity production shifting to China

But it moves one of the engines of the Chinese economic boom — automotive manufacturing — to a region just beginning to feel the financial impact of that revolution.  Chinese leaders have been urging automakers to expand beyond the primary region along the Pacific Coast and makers are beginning to embrace that call, if for no other reason than to hold down manufacturing costs.

As routinely happens when automotive manufacturing expands, workers in cities like Shanghai and Beijing have seen significant wage and benefit increases in recent years.

There are challenges, however.  VW says it will work with suppliers to establish a base that can support the company’s planned Urumqi plant, due to open in 2015.  And work will likely be needed to smoothly ship cars off the line.

As Henry Ford realized when he opened his Model T plant in the Detroit suburbs almost a century ago, relatively high-paying auto jobs help create their own market.  And by boosting the fortunes of mid- and Western China, automakers are hoping to open up the third, fourth and fifth-tier cities that could provide the momentum for future growth even as demand in traffic-choked cities like Beijing begins to level off.

Xiamen Jinzhi

The ad campaign promises: "You see the world, the world sees you."

Is it a smart thing to try and profit off of someone else’s tragedy?

One company seems to think so.

A Chinese fashion firm, Xiamen Jinzhi, has named a line of its sunglasses Helen Keller. 

This is no marketing mistake, or lost in translation. A spokesman for the company, Chen Wenjing, told the Wall Street Journal, they were well aware Keller was blind, but saw merchandising value in her “philanthropist spirit.” 

It appears Helen Keller is a famous figure Chinese children learn about in school, according to the article. But maybe the fashion company’s marketing team didn’t pay attention when the course was taught. On the company’s Helen Keller sunglasses website, someone seems to have picked up a reference about Helen Keller from Wikipedia, “Helen Keller: She was the first deaf-blind person to earn a Bachelor of Arts degree.”

The company even produced an ad for the HK glasses, including paparazzi and a model donning the specs. When she puts on the glasses, the paparazzi go wild, and the promo promises: “You see the world, the world sees you.”

Just in case you're wondering, there is no record of Helen Keller ever having worn sunglasses, said Carl Augusto, president of the American Foundation for the Blind, an 90 year old advocacy group that Keller worked for up until her death in 1968. "There is no evidence she wore sunglasses in our archives of 1,500 photographs and 80,000 documents, not a mention or photo of her wearing sunglasses," he said.

As for the use of Keller's name to hawk a product, Augusto said, "we're never happy unless Helen Keller is portrayed in a way we feel she should be portrayed, as an inspiration and someone who showed the world that people with disabilities are just like everyone else."

That said, he admitted, Keller had quite a sense of humor and probably would have "laughed hysterically" when she heard about the strange homage to her legacy.

While the name choice may seem odd and distasteful, it has gotten a lot of press attention from around the globe, including this headline from the UK's Daily Mail: "Cultural Blindspot?"

It's the type of exposure every company craves, but in the end what does it say about the people behind the name?

Keller may have said it best: "The most pathetic person in the world is someone who has sight but no vision."

Ford says it will spend $600 million to expand its factory capacity in China as it tries to play catch-up with competitors.

The company says it will add to its factories in Chongqing to handle growing demand. The additions will give Ford the ability to make 350,000 more vehicles per year by 2014. That will increase its total to 950,000.

Ford Motor Co. says it plans to triple the cars in its Chinese lineup to 15 over the next three years. It also will add 20 new engines and transmissions.

The company will build a new assembly line, body shop and paint shop at the Chongqing site in southwestern China. The investment will be made with the company's joint-venture partner, Changan Ford Mazda Automobile Limited. 

The Associated Press contributed to this report.

Starbucks

The Seattle-based coffee giant announced big expansion plans in China.

Starbucks' strategy for China is like the company's signature roast: bold. The company announced plans to grow from more than 500 stores today to 1,500 by 2015.

The country's tea-drinking tradition aside, Starbucks is betting that a growing taste for coffee among Chinese consumers will continue. In just two years, Starbucks expects China to be the second-largest market for its cappuccinos and lattes behind the U.S. 

Starbucks has already been expanding its Chinese presence at an espresso-fueled pace: In fiscal 2011, it added an average of one new store every four days.

In a statement, the company said performance exceeded expectations. John Culver, president of Starbucks China and Asia Pacific, said the company wants to make its growth in China "holistic," saying that the new locations would incorporate "locally-relevant product and store design innovations."

In its 2011 annual report, Starbucks said 22 percent of revenue came from its international portfolio and said it planned "faster expansion in key emerging markets like China." This year, the company also plans to open its first coffee shop in India. 

Starbucks probably didn't need to do much market testing to confirm demand in the Chinese marketplace. The brand is already popular enough there that it spawned a knockoff. In 2004, Starbucks filed a trademark infringement lawsuit against a company that mimicked its green-and-white logo and had a name phonetically similar to that of the Seattle-based chain.

Related:

Starbucks draws flak over dye made from bugs 

China switching from tea to 'black gold'

A chance discovery during an FBI investigation uncovered what authorities say is proof of a phenomenon long suspected by corporate espionage experts: Companies owned by the Chinese government have a growing appetite for the trade secrets of American corporations, and they're soliciting foreign nationals in the U.S. to steal them.

In this case, a couple allegedly spent more than 10 years tracking down the formula for a white pigment produced by chemical company DuPont. The Wall Street Journal reported that Walter and Christina Liew planned to turn over their findings to Pangang Group, a company owned by the Chinese government.

"Chinese actors are the world’s most active and persistent perpetrators of economic espionage," the Office of the National Counterintelligence Executive wrote in a congressional report last October. "Of the seven cases that were adjudicated under the Economic Espionage Act ... in Fiscal Year 2010, six involved a link to China."

DuPont's method for manufacturing titanium dioxide is closely guarded by the company. Correspondence uncovered in a safe-deposit box linked the operation back to Pangang and high-level Communist Party officials in China, according to the Journal. The paper said DuPont alerted the FBI after receiving an anonymous letter about Liew's activities and finding DuPont information on the computer of a colleague, who has not been charged. 

The Liews were arrested in July and have been charged with trying to steal trade secrets and sell them to China. They have denied the charges.

Last week, the Department of Justice announced that another participant in the operation, Tze Chao, pleaded guilty to conspiracy to commit economic espionage. Chao, a former DuPont employee, "admitted that he provided trade secrets concerning DuPont’s proprietary titanium dioxide (TiO2) manufacturing process to companies he knew were controlled by the government of the People’s Republic of China," the DOJ said in a statement. 

M.E. "Mich" Kabay, chief technical officer of Adaptive Cyber Security Instruments Inc., and professor of information assurance and statistics at Norwich University, called state-sponsored corporate espionage "standard operating procedure" for China, although this case unearthed the first paper trail showing a request for trade secrets that began with the state, rather than a corporation, according to the Journal.

Chinese government officials have denied knowledge or endorsement of these kinds of activities. But Kabay said it's hard to believe that an autocratic, controlling government with significant involvement in the nation's industrial sector would be unaware of efforts to steal American trade secrets.

Unlike the relatively low-tech methods used by the spies in the DuPont case, Kabay said many attempts to steal trade secrets from American businesses are undertaken by computer hackers. He cited this as another example of Chinese state complicity or involvement in the theft of intellectual property, given its notoriously tight grip on its citizens' use of the Internet. "Their tolerance of criminal hacker groups is inexplicable without the assumption that the government is encouraging criminal hacking," he said. 

"Cyberspace is a unique complement to the espionage environment," the congressional counterintelligence report said, adding that "an onslaught" of recent attempts to penetrate the online security systems of American companies were traced to Chinese Internet  addresses.