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Jing Daily compiles the best in Chinese luxury, culture, business, arts, and investment news from around the world
NEW YORK – November 5, 2009 – Jing Daily, the source for the most important and timely news about the business of luxury and culture in China, today announced the launch of its new website (http://www.jingdaily.com). With insight and commentary gathered from the Chinese- and English-language blogosphere and top news sources around the world, Jing Daily offers up-to-date information about crucial developments and current trends in China’s luxury, business, arts, and cultural markets.
Posted in Art, auction, Automobile, Business, China, Chinese Art, Culture, Currency, Economics, Economy, Fashion, G20, Investment, Luxury, Museums, Sino-US Relations, Uncategorized
Tagged blog, China, construction, Culture, jing, Luxury
Rapid Growth Of Still-Nascent Middle Class Signals Opportunity For Investors And Family Offices In China
Many investors are banking on the prospects for Chinese middle class consumption
We’ve kept a close eye on China’s burgeoning middle class, which — despite its recent appearance on the world stage — already numbers in the hundreds of millions, presenting a vast and unique potential consumer base for companies selling everything from cars to jewelry, household goods to fashion. While the Chinese middle class is expected by many to play a major role in the global economic recovery, their buying (and saving) habits, investment strategies, and long-term financial goals by and large remain poorly understood. Today, the Wall Street Journal looks into emerging market investors who eschew the popular financial planning target customer — the wealthy or ultra-rich — to serve the Chinese middle class, and investors in the West who are banking on the continued growth of this consumer class.
In coming years, it seems inevitable that the increased consumption of China’s hundreds of millions of middle class investors will affect, in some way, investors and money managers in other countries. If that is indeed the case, it pays to read up on this subject now, when the market is just starting to be defined and more fully understood:
Encouraged by the steps the Chinese government has taken to boost consumption, some equity-fund managers are putting money into sectors related to domestic demand, such as retail, automobiles and financials.
Chinese industrialization in recent years has lifted the average income of millions, propelling them into the ranks of a swelling middle class some say could grow to be the largest in the world.
Posted in Business, China, Economics, Economy, Investment, Luxury
Tagged China, consumption, Economy, family office, finance, financial, financial trends, Investment, middle class, trend, wall street journal
Growth Among Chinese Luxury Customers Pushes Them Beyond Japanese, Americans To Become Top Consumers Of LVMH Brands
Chinese drinkers have made the country Hennessy's top market, surpassing the United States
LVMH Moët Hennessy • Louis Vuitton S.A., the mighty global juggernaut, has had a bit of a rough year in the traditionally reliable markets of North America, Japan and Europe. Despite cutbacks in spending in these established markets, however, there have been bright areas for LVMH, namely in emerging markets like China and the other BRIC nations and pockets of Southeast Asia. In regions where LVMH has only operated for a few years, or a few decades at the most, newly rich consumers are opening their wallets and flaunting their wealth in a way never seen before — and all of this translates to high hopes for luxury’s standard bearer.
In the wake of the global economic crisis, China has leapfrogged its developed-world counterparts in many high-end segments, driven mainly by the country’s second-tier urban growth, which — fueled mostly by commodity industries like coal which have not been as badly affected by the downturn — continue to grow and attract foreign investment. Second- and third-tier cities, which have seen high-end foreign boutiques opening up only in the last few years, have been a boon to major foreign brands because customers in these smaller cities present virtually no signs of “luxury fatigue” and feel that expensive luxury brands are an excellent way of conveying their newly found status — the flashier the better.
Earlier this year, China surpassed the United States as the world’s second-largest luxury market, and the country has Japan, #1, firmly in its sights. Many analysts believe that China, given current growth figures, should overtake Japan as the world’s top luxury market within five years. So what does this all mean for luxury brands? Today, the Wall Street Journal’s Matthew Curtin looks into LVMH’s “China Syndrome,” and make the case that where LVMH goes, so goes the luxury industry:
Chinese customers, both at home and on holiday in the shopping malls around the world, have become the biggest buyers of Louis Vuitton clothes and handbags and Hennessy cognac ahead of the Japanese and overtaking Americans.
Posted in Business, China, Economics, Economy, Investment, Luxury
Tagged China, chinese, consumption, global economic crisis, japan, louis vuitton, Luxury, LVMH, LVMH moet hennessy, north america, southeast asia, united states, wall street journal
Spending On Everything From Luxury Cars To Private Jets Shows Ultrarich Chinese Are Unleashing Their Inner Conspicuous Consumer
The exclusive club of "ultra-rich" in China are splurging amid the ongoing global economic doldrums
An interesting blog post today at the Wall Street Journal, where Robert Frank points out that the global economic downturn has turned a new spotlight onto a once-unlikely savior — the Chinese [ultrarich] consumer. While this group is exclusive to say the least, particularly in terms of the miniscule percentage of the Chinese population that can live up to this title, the staggering dropoff of the once mighty American, Japanese and even Russian luxury showoff has pushed the Chinese super-spender into the leading role.
Though Frank’s potential nicknames for this ultrarich group of big spenders — “Deng Xiaoblings,” for one — are a humorous take on the subject, the repercussions of an Eastward shift of conspicuous consumption and luxury shopping sprees could mean a great deal for established western luxury brands. Just as the increased buying power — and desire for diversification — seen among Chinese buyers of everything from gold to real estate to luxury cars to Chinese antiquities and contemporary arts has affected those markets and caused everyone from Bugatti to Sotheby’s to focus far more strongly on the China market than ever before, this China-bound luxury shift could very well change the nature and corporate strategies of the global luxury industry.
From the WSJ:
Purveyors of posh have a new mandate: Go East!
An updated forecast from Bain & Co. out this morning shows a stronger-than-expected rise in luxury sales for Asia–especially China. It said it expects luxury-goods sales in mainland China to jump 12% this year.
Posted in Art, auction, Automobile, Business, China, Chinese Art, Economics, Economy, Luxury
Tagged Art, auction, bugatti, China, chinese contemporary art, contemporary art, Economy, industry, Luxury, LVMH, robert frank, sotheby's, spending, ultrarich, wall street journal, wealth
“Seeds Of Change” Starting To Appear In Formerly Destitute Areas, Motivating Entrepreneurs To Develop Remote Countryside
China's rural areas remain far behind the wealthy east coast in terms of economic development. If entrepreneurs have their way, this will change over the next few decades
For years, China’s hinterlands have benefitted little from the huge economic growth that has transformed the country’s prosperous east coast, remaining underdeveloped and relying mainly on agriculture mainly as a result of their remoteness and often harsh terrain. If an article in today’s Financial Times is accurate, though, the next few years may be seen as a turning point for the mainly rural provinces in China’s interior. As much of China’s future growth will (or should) depend on domestic consumption and investment rather than foreign exports, the country’s interior — with its plentiful and comparatively cheap land and labor and delayed development (making it something of a “blank slate” for business) — should, if development is done correctly, make it one of China’s main engines of economic activity for decades to come. While this is obviously easier said than done, a number of motivated Chinese entrepreneurs have set out to do everything possible to make rural China prosperous, and — given the right mix of time and incentive — they might just be successful.
From James Kynge in today’s FT:
Reforms in rural finance, the monetisation of agricultural land and social welfare appear poised to turn China’s countryside from an indigent backwater to a driver of national economic growth over the next five to 10 years…Goldman Sachs has invested successfully in a leading sausage-maker. Wahaha Group, China’s biggest beverage company, owes its buoyant earnings performance largely to the rural market, where it commands a 60 per cent share. Rural China has also been a main force this year behind the surging sales of cars with a capacity of under 1.6-litres.
The fact that China’s second- and third-tier cities are the country’s major hope for sustainable business is well established. But what about the country’s fifth- and sixth-tier cities? With the sweeping changes already brought about by land privatization (perhaps downplayed by Chinese media, but a revolution in itself) and rapid commercialization of rural areas like Hubei, Zhejiang, Jiangsu, Shandong, Henan and Shanxi (as designated by the FT), still relatively impoverished and underdeveloped areas, the next 10 to 20 years could prove a windfall as companies invest in large-scale infrastructure projects (wind & hydro power plants), rail, housing, farms and heavy industry. The effect on common people’s lives could (hopefully) be dramatic.
Much like America’s continued economic strength was built largely on the development of its interior, China’s best option for growth based less on exports will be to lift its central and western provinces out of the centuries-old poverty that remains a plague in many areas.
Posted in Business, China, Economics, Economy, Investment
Tagged agriculture, China, development, economic development, Economics, financial times, hu jintao, infrastructure, Investment, railroad, rural
Increased Interest In Buying “Portable China” By Domestic Bidders At Auctions Around The World Has Wider Implications
Economist Ha Jiming sees a fully internationalized yuan within the next decade
Today, a piece on the internationalization of the Chinese yuan by Ha Jiming, the chief economist at China International Capital, China’s largest investment bank, was published on Forbes.com. Ha believes that — within the next decade — the yuan will be a fully internationalized currency, and that the implications for this will be important and far-ranging:
Not long ago, China’s currency, the yuan, wasn’t traded beyond the country’s borders. Yet in the next 10 years, it will become fully internationalized and join the ranks of the world’s main reserve currencies, beside the dollar and the yen.
The global march of the yuan is an extension of China’s success since the launch of its economic reforms 30 years ago. The status of a currency is commensurate with the economic power of a country. The U.S. share of global GDP, for instance, increased from 10% at the turn of the 20th century to 20% after World War I, raising the dollar’s importance; the rise in Japan’s share of global GDP from 7% in 1970 to 16% in 1988 also elevated the yen’s role as a reserve currency.
[T]he internationalization of the yuan will benefit China in general by increasing the appeal of Chinese assets and pool of investment funds. This is similar to what happens when a company’s stock becomes a blue chip. International demand for yen assets increased significantly in the 1980s, as did global demand for U.S. assets at the turn of the century.
Posted in Art, Business, China, Chinese Art, Currency, Economics, Economy, Investment
Tagged China, Economics, exchange rates, forbes, foreign exchange, forex, ha jiming, Investment, renminbi, RMB, US dollar, yuan
Ausen Real Estate Development Set To Invest US$22 Million In Luxury Home Furnishing Retail Complex, Due To Open Next Year
Ausen World will bring a Western-style furniture shopping experience to Shanghai
While announcements of new large-scale real estate projects in China are nothing new, nor are they particularly exciting on the whole, Ausen Real Estate Development Co.’s recently-announced plans to open a massive home furnishing retail complex near Shanghai next year stand out. Set to be located in Xinbang, in Shanghai’s Songjiang District (less than an hour’s drive southwest of downtown), the austerely named Ausen World Brand Home Furnishings Center will include features not often seen at furniture stores, including a hotel and restaurant for shoppers who prefer to make a weekend out of their shopping trips. Although slapping a hotel onto a massive furniture store isn’t exactly unheard of, it most certainly is unusual.
According to company spokespeople, Ausen World‘s main focus will be on American and European furniture, popular but often poorly understood by Shanghai-area residents. The center will also include Premium home furnishing areas designed to emulate “DIY” stores like the Home Depot. From Furniture Today:
Another unusual feature for a Chinese retail center will be the presence of on-site interior designers, who can help consumers with home design and product choices.
In a statement, Ausen said it intends to be a door to the Chinese market for Western brands. It will offer help with operating in the country, including support of import entry, logistics and storage.
Zhang said he believes the center will offer a “family feel” that is missing from most Chinese retail spaces, with a rewarding consumer experience for shoppers and their children. An Australian company will design the “eco-garden” look of the complex, including outdoor leisure areas.
Posted in Business, China, Culture, Economics, Investment, Luxury
Tagged ausen world, Business, China, chinese, Economics, furnishing, furniture, home, hotel, IKEA, Investment, Luxury, real estate, restaurant, shanghai, trade, western
Chinese Firms, Sovereign Wealth Fund Taking Advantage Of More Affordable Investments Overseas In Wake Of Economic Slowdown
Graphic by Erik Bethel
Chinese investment overseas has been one of the major news developments of the last year. Although Chinese outbound investment is nothing new, particularly after the country joined the WTO in 2001, falling asset values abroad — along with a gradually strengthening yuan — have made overseas investment a major priority for the government (and its state-owned enterprises) as well as private Chinese companies.
If a recent article by China’s Peoples’ Daily is, indeed, true, it looks like outbound investments, at nearly US$150 billion, nearly triple last year’s amount of US$52 billion, will continue the dramatic upward trend we’ve seen them follow over the last 5 or 6 years.
As Erik Bethel (an excellent source on investing in China and Latin America) writes in Seeking Alpha, the People’s Daily article highlights some quotes by Fan Chunyong, the standing director of China Industrial Overseas Development and Planning Association, in which he says that the sheer volume of year’s outbound investments by China — which are, at nearly US $150 billion, for the first time higher than inbound investments — indicate that China is already making a shift from a “manufacturer” to a “capital exporter.”
Posted in Art, auction, Business, China, Economics, Economy, Investment
Tagged assets, China, chinese, erik bethel, FDI, foreign direct investment, Investment, outbound, overseas, peoples' daily, seeking alpha, sino-latin capital, WTO