Yu Yiqun, the creative director at an advertising company in the Chinese capital, cycles to work on his favorite bike – a 100,000 yuan ($16,000) hand-made Alex Moulton.

“It might be the only one in Beijing. It’s like the Rolls-Royce of bicycles. Very classical, purely hand-made,” said the 40-year-old Yu, who has about 35 high-end bikes.

“I remember my father used to ride me to the city in the winter – about 40 km and minus 30 degrees centigrade. Back then, it was a means of transport that fulfilled your dream of travelling afar, which was relatively cheap but required brawn.”

[…] “Demand for mainstream luxury items such as premium cars, watches has come to a point of saturation. High-income groups now turn to high-end bikes to show off the uniqueness in taste and healthy lifestyle,” said Zhou Jiannong, general manager of Rbike Networks Ltd in China.

The phenomenon is not entirely new: Malcolm Moore reported on cycling’s fashion resurrection at The Telegraph in 2011.

© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: bicycles, cars, fashion, luxury, watches, wealth gap
Download Tools to Circumvent the Great Firewall

Yeoh warns that any sort of direct play requires research, but he has some handy tips. He says investors should look at what the Chinese will want to buy during the next decade. He also prefers established Western companies with a healthy exposure to China’s growth, notably luxury-goods companies.

”Generally, you would think that the corporate governance would be better for Western companies,” he says. ”There’s going to be more disclosure, and it’s a lot easier to understand a luxury-goods company generally than some sort of Chinese internet company.

[...] The downside is that the appeal of luxury brands can be fickle, and the saturation of brands could render them unpopular. ”[Shanghai women] always pride themselves as the most sophisticated and elegant and most open to the West,” Yeoh says. ”When they see the mistresses of the Shanxi coalminers wearing Louis Vuitton … they need to be wearing something else.”

See more on luxury demand in China via CDT.

© Mengyu Dong for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: conspicuous consumption, foreign businesses, foreign investments, luxury, luxury brands, middle class, mistresses, urban life
Download Tools to Circumvent the Great Firewall

It comes as no surprise to anyone following global markets that China is slowing down, along with most of the global economy. Economic indicators for August revealed a deceleration in industrial production, a tick down in nominal fixed investment, and a negligible increase in nominal retail sales (below inflation); imports for consumption dropped 7.5% in August, indicating a significant weakening in domestic demand, Nomura’s economic research team explained.

China’s explosive growth, along with the rest of Asia and many of the so-called emerging markets around the world, helped luxury brands buck the trend and perform well despite the troubles facing the global economy. Burberry, for example, was up 10.6% to Monday’s close in 2012, before disclosing its latest sales numbers.

On Tuesday, the iconic British brand revealed that its retail sales at constant exchange rates grew only 6% in the ten weeks to September 8. More troubling, same-store sales showed no growth, meaning all of the 6% they saw came from new space. “Burberry currently expects adjusted profit before tax for the twelve months to 31 March 2013 to be around the lower end of market expectations,” read the release; the FT put those expectations between £407 and £455 million ($653 million and $730 million).

This slowdown may be partially linked to a crackdown in China on officials’  displays of conspicuous consumption and gift-giving. From the Wall Street Journal:

Burberry Chief Financial Officer Stacey Cartwright said typical gift giving has slowed following new scrutiny of public displays of wealth.

“Clearly that’s having an impact,” Ms. Cartwright said in an interview Tuesday. “We called out in the last release the fact that the gift giving part of the business [in China] had slowed very significantly. Clearly there’s the changing of the guard coming very shortly, and we’ll have to see what comes after that.”

Adrian Cheng, chief executive of Chow Tai Fook Jewellery Group Ltd., 1929.HK +0.52% one of the world’s largest jewelry companies, cited similar concerns in an interview, saying uncertainty surrounding a coming political leadership transition expected to begin this fall has thrown a pall over the attitudes of some consumers. Demand will return “when there’s more clarity,” he said.

The backlash against officials’ penchant for flashy clothes and accessories points to deeper issues in Chinese society, notably corruption, the growing gap between rich and poor (which even extends to prison), and the abuse of power. The Guardian reports on recent cases of official displays of wealth which have generated public outrage:

There is no shortage of cases. In recent days one official, Yang Dacai, faced scrutiny online for obtaining watches worth tens of thousands of pounds on a salary estimated at about £1,000 a month. That was followed by reports this week that the victim of a fatal Ferrari crash in March had been the son of one of President Hu Jintao’s key allies.

“Cases like the Ferrari and Yang cases hurts the regime’s legitimacy terribly,” said Xiaobo Lu, an expert on corruption at Columbia University. “The government has a huge challenge with the ‘trust deficit’.”

At best, such images highlight the growing gulf between China’s rich and poor, and the extent to which officials and their families appear to be aligned with the winners.

© Sophie Beach for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: corruption, foreign companies, luxury, wealth gap
Download Tools to Circumvent the Great Firewall

“I like luxury goods; I love to consume,” he says. “I have money; I gotta spend it.” He is wearing Ferragamo shoes, an Armani polo, and Kiton pants. The wallet is from Bottega Veneta, the socks from Prada. The underwear? He says I have to accompany him to the hot springs to find out, but he assures me that they cost more than 800 yuan, or $125.

“We all used to wear plastic slippers,” a young man named Wu Ruiqi says while sipping Champagne. “There wasn’t fashion before. Everyone wore the same thing. Now there are two kinds of shoppers: fashion-forward, and clichéd customers who all buy whatever brand just for the logo, like a swarm of bees.”

“I don’t have any other hobbies,” she says. “My only hobby is shopping.” She is wearing a white-lace dress and a diamond Dior monogram necklace, the same one that a girl who walked out of Chanel a few minutes before her was wearing. “Beijing girls, they all buy the same luxury items,” she says. “It doesn’t matter if it takes a month’s worth of salary. Chinese people are blind followers. Some people say they hate rich people, but it’s just sour grapes. If they had money they would buy it too.“

The article also includes an illustrated guide to fashion jargon, from 暴发户 to 自拍.

The broader retail sector has cooled both in China and elsewhere in Asia, and CNBC recently reported that middle class Chinese are increasingly shunning luxury goods in favour of foreign travel. But with prices abroad far lower than in China, the two often go hand in hand. Hubei TV reporter Tong Li wrote in Global Times this month that colleagues covering the London Olympics had descended in a “shopping frenzy” on the nearby Bicester Village outlet centre. At The New Yorker last year, Evan Osnos described a ‘Grand Tour’ of Europe with a coachload of bargain hunting Chinese tourists.

© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: consumerism, fashion industry, luxury, luxury goods, moutai, nouveau riche, waste
Download Tools to Circumvent the Great Firewall

Many Chinese women will spend far more of their income than their Western counterparts on these magazines and the products featured inside them. According to a 2011 study conducted by Bain & Company, mainland China ranked sixth in the world for spending on luxury goods ranked by country. In 2010, it was a $17.7 billion market. Louis Vuitton, Chanel and Gucci remain the most desired luxury brands.

[…] Lena Yang, general manager of Hearst Magazines China, who oversees nine publications including Elle and Marie Claire, says that the typical reader of Hearst Magazines in China is a 29.5-year-old woman who is more likely to be single than married. She has an average income of about $1,431 a month and spends $938 a season on luxury watches, $982 on handbags and shoes and $1,066 on clothes.

Meanwhile, movie producers in Hong Kong also found themselves contending with Louis Vuitton handbags. From Bloomberg:

In real life, the Hong Kong film producer is losing the fight against a more insidious adversary: the luxury handbag.

Gone are the days when landlords in Hong Kong used movie theaters as a way to draw visitors to malls, says Kong, executive director of Edko Films Ltd. “Now they say ’Get out, we want LV.’”

No wonder, when a Louis Vuitton Monogram Empreinte Artsy MM bag sells for more than HK$20,000 ($2,578) in the city and mall owners get a share of the sale on top of rent.

Read more about luxury consumption in China via CDT.

© Mengyu Dong for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: conspicuous consumption, fashion, luxury, urban life
Download Tools to Circumvent the Great Firewall

This may seem strange, given that the Chinese have propelled their country into the top ranks of global economic powerhouses over the past 30 years. There are those who predict a hard landing for an overheated economy — where growth has already slowed — but the acquisition of wealth is better understood not just as an economic cushion, or as pure greed, but as a political hedge.

China’s Communist leaders cling to Deng Xiaoping’s belief that their continuance in power will depend on economic progress. But even in China, a mandate based on competence can crumble in hard times. So globalizing one’s assets — transferring money and educating one’s children overseas — makes sense as a hedge against risk. (At least $120 billion has been illegally transferred abroad since the mid-1990s, according to one official estimate.)

…

Today, the party’s 80 million members are still powerful, but most join the party for career advancement, not idealism. Every day, there are some 500 protests, demonstrations or riots against corrupt or dictatorial local party authorities, often put down by force. The harsh treatment that prompted the blind human-rights advocate Chen Guangcheng to seek American protection is only one of the most notorious cases. The volatile society unleashed against the state by Mao almost 50 years ago bubbles like a caldron. Stories about the wealth amassed by relatives of party leaders like Mr. Bo, who have used their family connections to take control of vast sectors of the economy, will persuade even loyal citizens that the rot reaches to the very top.

Last week, The Guardian reported that three retired CCP officials called on leaders to disclose their family wealth before the issue further erodes the party’s grip on power ahead of the upcoming leadership succession.

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: Bo Xilai, CCP, CCP legitimacy, corruption, Deng Xiaoping, luxury, princelings
Download Tools to Circumvent the Great Firewall

“It will be every bit as luxurious as the original Titanic but of course it will have state-of-the-art 21st century technology and the latest navigation and safety systems,” [Clive] Palmer said in a statement.

“Titanic II will sail in the northern hemisphere and her maiden voyage from England to North America is scheduled for late 2016.”

He added that he had invited the Chinese navy to escort the Titanic II to New York ….

His decision to commission a Chinese shipbuilding yard, which will also construct other luxury liners for the tycoon, reinforces his ties to the country, which is a key buyer of his coal and iron ore.

Palmer acknowledged that the venture might seem to be tempting fate, displaying none of the hubris unfairly associated with the original. From CNN:

“Of course, it will sink if you put a hole in it,” Palmer said at a press conference. “It is going to be designed so it won’t sink. But, of course, if you are superstitious like you are, you never know what could happen.”

Cameron told The Hollywood Reporter at the Beijing International Film Festival last week that he was “having some Avatar 2 and 3 Chinese co-production discussions“; if history does tragically repeat itself, Titanic 2 (The Movie) might be made in China as well.

© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: Australia relations, film industry, luxury, mining industry, shipbuilders
Download Tools to Circumvent the Great Firewall

EXT. HIGHWAY IN CHENGDU–NIGHT

SUPER: TWO NIGHTS AGO

A jeep careens into view and screeches onto the highway in this city, the capital of Sichuan province.

INT. INSIDE THE JEEP

At the wheel is a Chinese man of Inner Mongolian heritage. He wipes perspiration off his forehead and whips his neck around. In the rear view mirror, a fleet of police vehicles with flashing lights come into view. The faint sound of sirens grows louder.

This is Wang Lijun, until recently Bo Xilai’s police chief and right-hand man on fighting crime in Chongqing. If Bo is Rudy Giuliani, then Wang is his Bernie Kerik. Now, recently removed from his post, he is running for his life.

WANG LIJUN

(muttering through clenched teeth)

Come on, come on, you’re gonna make it.

Wang cranes his neck around another time, fiddling with his glasses, which have fallen down his face. A blanket of police cruisers are gaining.

He glances at the passenger seat: a pistol rests on it.

He turns back to the road, steels his expression and floors the jeep.

A couple of miles ahead, a stately building rises into view. Standing before it is the star-spangled banner fluttering in the wind.

The news that the former Chongqing party chief deployed China’s state-financed surveillance apparatus to eavesdrop on President Hu Jintao and other leaders adds yet another layer to the mistrust and deception that has marked China’s biggest political scandal in years, but The Washington Post’s Michael Levy claims that the Bo Xilai saga has not and will not change the way Chinese view their government:

When Western media report on Chinese scandals, they decontextualize them to such a degree that melodramatic conclusions are all but inevitable. From Guo Meimei to Sanlu milk, there’s always something about to bring down the curtain and reveal the sad little wizard running the Communist Party.

Or at least that’s the subtext in reporting packaged for Western consumption. Our media often seem caught in a feedback loop of schadenfreude and narcissism.

But looked at from a Chinese perspective, things are more circumspect. My Chinese friends do not see the Bo Xilai scandal as anything more than high-stakes politics. They know politics is a dirty business and that many people use government to enrich themselves. This upsets them. Overall, however, they see things moving slowly in the right direction.

To understand scandals in China, westerners would do well to remember that China is not a banana republic. There is no wizard behind a curtain. This is not a country run by thieves and warlords. China has a stable, highly effective government. Yes, there are officials who are rotten through and through. There are also officials who are serious about reform. China has its Jimmy Carters (men beyond reproach) and its Oliver Norths (grotesque halflings, oozing around in filth).

The Washington Post also reports that Premier Wen Jiabao has moved aggressively to push forward a reform agenda that had gained little momentum prior to Bo’s ouster. In an interview with PBS Newshour’s Margaret Warner, CDT’s Xiao Qiang reminds China watchers that Bo’s dirt has been aired publicly not because he’s a glaring exception in the world of China’s upper leadership, but rather because he lost a succession battle:

Click here to view the embedded video.

Meanwhile, the hits keep coming for Bo Guagua. Though he denied having driven a Ferrari and defended himself against claims he led a lavish and pampered lifestyle in a Tuesday statement to the Harvard Crimson, The Wall Street Journal reports that the “princeling” has picked up three traffic citations in Massachusetts while driving a Porsche:

Mr. Bo’s whereabouts is unknown, but he has lived until recently at an upscale apartment building in Cambridge, Mass., with a full-time concierge and sun deck. Apartments like his typically rent for about $2,950 a month, according to rental websites. Mr. Bo appeared to have left his apartment nearly two weeks ago escorted by private security personnel, according to a person familiar with the matter.

Massachusetts Department of Transportation records show Mr. Bo was stopped by police for allegedly running stop signs in December 2010 and May 2011, one of them at 2:20 a.m., and for speeding in February 2011. The license plate of the car, which the Journal learned from someone familiar with the matter, showed it was a black 2011 Porsche Panamera registered to someone at his address. Cars similar to that cost $80,000 or more new, according to Edmunds.com.

The license plate on the car is registered to James Jun Cui, according to state records. A person with that name has an address in New York City. A man who answered a cellphone linked with Mr. Cui on Thursday evening was asked about his relationship with Bo Guagua. He replied, “I’m traveling, now is not a good time,” and hung up.

The less-publicized Li Wangzhi, one of the many aliases of Bo Xilai’s eldest son, tells Bloomberg that his father’s downfall has ruined his life:

Li, 34, said in a telephone interview yesterday that the last time he saw his father was at the funeral of his grandfather, Bo Yibo, in early 2007, and he hasn’t had any contact with him since. The former Citigroup Inc. (C) banker, who later went into private equity, said he was in China and not under detention.

Li’s comments seek to dispel speculation he profited from the position of his father, who was suspended earlier this month from the ruling Politburo. The ouster of Bo and the arrest of his wife on suspicion of murder have heightened scrutiny of the family’s business interests and sparked China’s deepest political crisis since the 1989 Tiananmen uprising.

“This incident has destroyed my life,” said Li, who also goes by the name Brendan Li. “I have no way to control how others think, but I have no desire to bask in his glow,” he said, referring to his father.

On Thursday, Bo’s brother Li Xueming resigned from his position on the board of state-controlled alternative energy company China Everbright International.

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: Bo Guagua, Bo Xilai, corruption, luxury, princelings
Download Tools to Circumvent the Great Firewall

To witness the frenzy firsthand, head to Beijing’s Caishikou Department Store, a four-story gold emporium that rang up sales of $1.5 billion last year. Visitors be warned: sharpen your elbows and be ready to push.

To buy a necklace, shopper Wang Li recently fought her way through a scrum of cash-waving customers hanging over a glass counter loaded with gold chains, Mao pins, pendants of Christ on the cross and more.

“I thought about buying Swarovski crystal, but I don’t think it will ever be as valuable as gold,” said Wang, a 24-year-old teacher who treats herself to a new piece of yellow-metal jewelry about once a month. “Besides, I like how feminine gold makes me feel.”

On another floor, customer Zhang Li waited in line to purchase gold bars, an investment he describes as the only safe bet left for ordinary Chinese.

“If I had invested in stocks or property last year, I would have lost money,” said Zhang, 36.

As Mr. Zhang says, and as Sydney University’s John Lee claimed in a piece for The Financial Times earlier this month, China’s consumer-driven gold rush is fueled by more than just a fear of inflation:

A better explanation could be the lack of alternatives for households that are the best savers in the world. In an economy lacking financial sophistication and depth, options are limited to savings accounts, which offer negative real returns, stocks listed on one of the two national exchanges, or else property.

The problem with stocks is that in most listed companies, state-owned enterprises hold a majority of shares. Combined with abysmal financial reporting, poor transparency and lax trading rules, stock prices are easily manipulated by insiders.

Property is the other alternative. But Chinese knew of the country’s infamous ghost cities long before the international media. Knowing that yield was irrelevant, as many of these properties will never be rented out, locals knowingly bought them as speculative capital assets. Now prices have collapsed in many areas, locals are much more wary of pouring capital into an asset that may never offer a reliable return.

See also recent CDT coverage of gold in China, where imports hit a record high late last year as the Chinese continue to blur the lines between retail and investment demand for the precious metal.

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: gold, inflation, investment, luxury
Download Tools to Circumvent the Great Firewall

As year-end reports on 2011 emerge from companies and organizations around the world, an astonishing picture is building of extravagant, high-end Chinese spending that offers a glaring contrast to the hardscrabble, high-saving image of most Chinese.

Wealthy Chinese are snapping up gold, Rolls-Royces and yachts, Louis Vuitton, Chanel and Gucci faster than ever before, with increases registering not in baby steps, as a decade ago, but in giant leaps — 20, 50, even 80 percent, year on year. The Chinese have become the world’s biggest duty-free shoppers.

Where is all the money coming from?

Tantalizing research by Wang Xiaolu, deputy director of the National Economic Research Institute at the independent China Reform Foundation, based in Beijing, may offer a kind of Kepler telescope for viewing the economy at something like its true size.

Read more about wealth and poverty in China and the wealth gap through our special feature The Great Divide.

© Sophie Beach for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: gray economy, luxury, statistics, wealth gap
Download Tools to Circumvent the Great Firewall

This week’s announcement that Italy’s Ferretti Yachts will soon be under Chinese ownership is the latest example. China’s state-owned Shandong Heavy Industry Group Co. said it will buy a 75% stake in the yachtmaker in a deal worth EUR374 million.

China’s elites are rabid consumers of the good life and luxury fashion labels have been cashing in. In addition to watches and handbags, China’s rich are spending on leisure pursuits too. High-end hotel chains in Asia in particular report a rapid increase in the number of Chinese tourists – as much as a twenty-fold surge at one resort in the Maldives since 2008.

As the post points out, the yacht industry is not alone in attracting Chinese investment: Last week, The Wall Street Journal reported that Indian property developer DLF was close to selling high-end hotel chain Aman Resorts to Chinese bidder HNA Group.

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: luxury, wealth gap, yachts
Download Tools to Circumvent the Great Firewall

Chinese fashionistas are displacing those immaculate Japanese women in their Burberry scarves as the world’s leading consumers of luxury goods. The consulting firm McKinsey & Co. projected that China will bump Japan out of first place by 2015 as the leading market for pricey goods. Even with the softening of China’s real estate market, the source of much new money, some analysts believe the Chinese already top the luxury market ….

Chinese officialdom has something of a love-hate relationship with luxury goods, officials relishing their own creature comforts while deploring anyone else doing it too flagrantly. China still has 150 million people living on less than $1 a day. And it maintains some of the highest taxes in the world on luxury goods, adding as much as 60% to the cost — which is why rich Chinese have become such prodigious shoppers abroad.

The word shechi, or “luxury,” is banned in advertising and company names, said Ouyang Kun, who runs a trade group in Beijing called the World Luxury Assn. “The government feels luxury items are only affordable for a few people. They don’t want to create unharmonious feelings among the people,” he explained.

Among the baubles on display is a $314,000 wedding cake, of which Bill Bishop has posted photos at Sinocism. See also more on luxury goods in China via CDT.

© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: automobile industry, cl, income gap, luxury, luxury goods
Download Tools to Circumvent the Great Firewall

To find out how China’s wealthy feel, one actually has to analyze wealthy people, not those in the middle. There are over one million people with more than $1 million in investable assets, and 271 billionaires, according to data from the Hurun Report.

Any analysis needs to look at that segment to determine the trends among wealthy consumers. My firm in the past two months interviewed several dozen people with more than one million dollars in investable assets, as well as a dozen people worth more than $10 million.

The results show the ultra rich, people worth more than $10 million, are actually getting richer and remain very confident about their earning ability and those worth more than one million dollars also reported being very confident. The vast majority reported that they planned to spend at the same or higher level in 2012. One businessman in the services sector in Shanghai told me, “The economic problems are serious but we expect profits to rise by 30 percent next year. Even if profits don’t go up, I plan on spending at the same levels or more.”

The Financial Times reported on Sunday that China has propped up the sales figures and stock prices of the world’s luxury retailers, from Hugo Boss to Burberry to Louis Vuitton, with analysts expecting the boom to continue as more big names charge in to offset stagnating sales figures at home. See also previous CDT coverage of the demand for luxury goods among China’s nouveau rich, including expensive cars and superyachts.

© Scott Greene for China Digital Times (CDT), 2011. | Permalink | No comment | Add to del.icio.us
Post tags: consumer spending, domestic demand, luxury, wealth gap
Download Tools to Circumvent the Great Firewall

Yesterday noon at 12:44pm Weibo user @巴蜀秀才 posted on the road claiming that “17 million, to construct this broken boat, dived as soon as it entered the water, isn’t that ridiculous??” the accompanied pictures showed that a boat capsized on the Yellow River, with the stern and the rear-half of the ship in the water, the bow of the ship pointed up 30 degrees. In just a few hours this Weibo had been reposted over 3,400 times.

Yesterday afternoon, reporters contacted Lanzhou city Ministry of Transportation Propaganda chief surname Qiao, who verified this event and explained that “the cause of the event was due to improper handling from the builders who mistakenly estimated the water level causing the water level to exceed the limit, leading to the rear half of the ship to take on water and sink.” October 2nd, the boat was pulled from the water, and is currently under repair. Chief Qiao stressed, the builders should bear the main responsibility for this incident, and that this incident did not produce any casualties, while expressing that, “currently the boat is undergoing repairs and it is estimated that it will launch again in a month.”

Chief Qiao also stated, this boat’s builder is a shipbuilder from Sichuan. But reports showed that “SS Jiugang” commenced construction at Xiaoxia Shipbuilding at Gaolan in Gansu Province, while on September 8th reporters saw the nearly completed “SS Jiugang” at a reservoir at Gaolan County. At the time the ship wheel, gauges and other instruments have been completed. This is contrary to Chief Qiao’s assertion that it was built in Sichuan.

Video of the event surfaced on Sina.com.

As China’s rich get richer and its luxury industry appears primed for expansion, local yacht makers have jumped in the water with their western counterparts. Some are export-oriented manufacturers for international brands that turned inward during the financial crisis and built up their own domestic brands, according to a report last year in the China Daily.

Even provincial governments are jumping on board, though at their own peril.  Last week, AFP detailed online outrage towards officials in Zhejiang who claimed they used government funds to purchase a yacht for the purposes of tax collection:

The zjol.com.cn news website, which is run by authorities in Zhejiang, quoted tax official Fang Yongjun as saying the yacht’s two decks had been converted for use as a tax collection office.

The tax bureau needs the yacht because many local businesses operate on the Thousand Island Lake, a national tourist area, the report said.

It quoted the yacht’s builder Ma Xiaochun as saying the 2.71 million yuan ($555,000) price tag was low compared with other boats on the lake.

But netizens were unconvinced. “Do they need a helicopter for tax collection in the mountains?” asked one web user on Netease.com, a popular Chinese portal.

Public spending has come under growing scrutiny this year after Beijing ordered central government departments to publish details of their expenditure on cars, foreign trips and receptions.

See additional CDT coverage of China’s wealthy elites and how they spend their fortunes on art collections, cars and fake helicopters.

© Scott Greene for China Digital Times (CDT), 2011. | Permalink | One comment | Add to del.icio.us
Post tags: government spending, Information Revolution, luxury, netizens, sina.com, wealth gap
Download Tools to Circumvent the Great Firewall

The four-day Hainan Rendez-Vous brought together luxury brands catering to various market segments, like Martell Cognac and Maserati, with business-jet makers and international yachting brands, like Azimut, Ferretti Group, Feadship and Lürssen.

“Encouraging Chinese to own yachts is the biggest challenge this industry faces,” said Tork Buckley, a founder of Big Blue Consulting, which consults shipyards and clients on new construction build and refit specifications. “God knows, they have the money.”

For now, the first thing China’s new rich think about buying “is a name-brand watch, a Ferrari, an apartment,” said Mr. Buckley, who is also the Asia editor of the magazine The Superyacht Report. “They’re not thinking of yachts, yet.”

“Hainan goes a long way toward helping that because it puts Chopard next to Lürssen,” he added, referring to the Rendez-Vous event. “They know Chopard, but don’t know Lürssen, and that builds Lürssen’s brand.”

Along with international yacht-manufacturer brands, the Hainan event also attracted home-grown brands, including Kingship and Heysea Yachts, which are just starting to flex their muscles, especially in the super-yacht category.

© Sophie Beach for China Digital Times (CDT), 2011. | Permalink | No comment | Add to del.icio.us
Post tags: luxury, wealth gap, yachts
Download Tools to Circumvent the Great Firewall