Daily Archives: May 14, 2009

The Rising RMB And You: What Does It Mean For Art Collectors?

As China’s Currency Becomes Increasingly Global, Will Collectors Of Chinese Art Benefit?

As the RMB appreciates and becomes more convertible, Chinese assets like art look to be a smart hedge. Painting: Chinese contemporary artist Qi Zhilong's "A Chinese Girl In Male Military Uniform No. 2" (2006)

As the RMB appreciates and becomes more convertible, investing in Chinese assets like art looks like an even better option. Painting: Chinese contemporary artist Qi Zhilong's "A Chinese Girl In Male Military Uniform No. 2" (2006)

In recent months, a number of high-profile Chinese and world economists have increased their calls for the creation of a truly “global currency,” which would diminish the US dollar’s role as the de facto international currency sooner rather than later. Although this concept is still far off, as these economists concede, definitely within the next 10-20 years the dollar’s primacy will be challenged, if not completely nonexistent.

Although this is not some kind of dollar apocalypse, but rather a readjustment of the global economy based more on a realistic global picture. In the post-Cold War, post-BRIC-growth world, we are seeing the world economy pluralize rapidly. So a global currency will require an accurate portrayal of this multipolarity — thus, it is unlikely that the next global currency will be “from” one country. Rather, it is likely to be a multi-currency basket, or “supracurrency” — as the governor of the People’s Bank of China, Zhou Xiaochuan, himself called for in March.

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Outlook for Luxury Goods Rough…Outside of China

Luxury Brands Relying On Demand From BRIC Countries To Get Them Through Economic Crisis

The economic crisis hasn't dimmed the hopes of Dunhill's China Managing Director Jonathan Seliger for the brand's viability in the Chinese market. Photo © Mick Ryan.

The economic crisis hasn't dimmed the hopes of Dunhill's China Managing Director Jonathan Seliger for the brand's viability in the Chinese market. Photo © Mick Ryan.

The growing economic clout of the BRIC countries – Brazil, Russia, China, and India – continues to buoy luxury brands, helping to counteract the drop in demand from more established global markets. As luxury brands report their earnings from the first four months of 2009, we can clearly see that the plummeting demand in North America, Europe, and Japan has been somewhat devastating.

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