“Golden Week” Still Golden For China’s Rich
The average wealth of China’s super rich may be down this year, but that hasn’t stopped them from going all out with their “Golden Week” travel plans. From Reuters:
Helen Shen, a travel planner in Shanghai, said a private business owner had booked the whole first-class section of a Lufthansa jet to fly his family of four to Paris this month.
Shen is one of many luxury travel organisers who still see the money rolling in from executives and members of the “fu er dai” – the second generation of wealthy families – despite China’s economic uncertainty.
“If you look at your affluent Chinese overseas, they are your tourist, your shopper, your investor all in one,” said Christine Lu, co-founder of Affinity China, a Shanghai-based luxury travel firm.
“Even though there is all the talk of a slowdown in China, the luxury sector we are dealing with is a segment that can still afford to travel,” Lu said.
The luxury travel industry may still be thriving, but other sectors have not fared as well. For The Financial Times, Chris Bryant and John Reed report that China’s luxury car sector may finally be catching a cold, and the Wall Street Journal’s Tom Orlik explores the sharp fall in retail sales of luxury jewelry:
One reason is of course the economic slowdown. Another: The once-in-a-decade transition in China’s top leadership – which is expected to take place at the 18th Party Congress some time in October.
Gift giving, which oils the wheels of business, accounts for about 16% of China’s luxury sales according to estimates by CLSA. The leadership transition, which will ripple down from the top leadership to decision makers at all levels of the government, has thrown that into confusion.
One Beijing based salesman from a major luxury goods importer who spoke to The Wall Street Journal summed up the problem facing the sector: “Sales are down because no-one knows who to bribe.”
See also previous CDT coverage of how the global economic downturn has impacted China’s ultra rich.