China And Hong Kong Get Ready To Begin Bilateral Trade Scheme, Announced Last December. What Will It Mean For Holders Of Portable Chinese Assets Like Art?
The internationalization of the RMB could be a huge plus for holders of portable Chinese assets in coming years. Photo © Reuters
The internationalization of the Chinese yuan has hit a major milestone, as China’s Central Bank Governor Zhou Xiaochuan, and Joseph Yam, chief executive of the Hong Kong Monetary Authority, today signed a memorandum in Hong Kong to set off bilateral trade that can be settled in Chinese yuan rather than Hong Kong or U.S. dollars. The move, which follows similar “currency swap” agreements signed by China and Argentina, Malaysia, and South Korea in recent months, illustrates the urgency with which China’s Central Bank is looking to globalize China’s currency. While none of this is really “new” to China-watchers, the importance of this story — and the story of China’s rapidly-internationalizing currency — is in what it means for investors who have “bought into” China. While it won’t mean much for holders of Chinese real estate or stocks, the real story here is in portable goods, an area which we have covered in detail several times before. With the globalization of the RMB comes a revaluation of portable goods (which can be carried across borders and converted into alternate currencies).
Posted in Art, Business, China, Chinese Art, Currency, Economics
Tagged cash, China, Currency, hong kong, money, RMB, trade, yuan
Unlikely Collectors In Far-Flung Rural Areas Gaining Notoriety For Massive Antiques Spending Sprees
More than 1,000 collectors took part in the Taiyuan antiques fair, held in north China's Shanxi Province. Image © CCTV
We have written several times before about the growing role of Chinese art collectors in a number of art classes, from Chinese antiquities to contemporary Chinese art, and as the global downturn affects the buying and collecting habits of more established collectors, antiques dealers from Hong Kong, the UK and the US have flocked to new “fairs” in mainland China, where “coal tycoons” — often unassuming (but sometimes ostentatious) individuals who have built vast fortunes on the rural provinces’ coal deposits — are quickly becoming a major collector base. As Le-Min Lim writes for Bloomberg, this new collector base has rapidly becoming one of the most motivated (and willing to spend top dollar) of all global antiques buyers.
While Westerners still dominate the most-expensive segment of this market at auction, they are increasingly being challenged by buyers from mainland China, according to John Berwald, of New York-based dealership Berwald Oriental Art.
Christie’s says Americans are its biggest clients in this category of art, followed by mainland Chinese and Hong Kongers. While Shanxi buyers are new to the international art-trading scene compared with their Beijing and Shanghai peers, they are gaining a name as some of China’s fiercest bidders.
“They are a force to reckon with, no doubt about it,” said Kevin Ching, chief executive of Sotheby’s Asia, who attended the Taiyuan fair. On paper, Shanxi buyers formally accounted for just $4 million of Sotheby’s Chinese antiques at its Hong Kong auctions, though the actual figure is much larger because many bid through agents in the city, he said, declining to give specifics.
There are about 51,000 people in China who have 100 million yuan or more, according to Hurun’s latest China rich list, released in April. Of these, 1,050 are in Shanxi. The actual number of rich individuals in the province is probably more than twice the number on the list, said Rupert Hoogewerf, publisher of Hurun Report, which compiles China’s rich list.
Posted in Art, auction, China, Chinese Art, Culture, Investment
Tagged antiques, bloomberg, China, Chinese Art, collecting, contemporary chinese art, Culture, hong kong, London, New York, Paris, sotheby's
Bar, Part Of Dunhill Flagship Store At Plaza 66, Extends Dunhill’s British Style And Traditional Atmosphere
The Aquarium by Kee in Plaza 66, Photo © Shanghai Daily
Plaza 66, a sprawling office and mall complex in Shanghai’s Jing’an District, recently unveiled the new Aquarium by Kee bar, part of the Alfred Dunhill flagship store. Designed to be an after-work sanctuary for the area’s businesspeople, the 40-seat bar extends Dunhill’s sophisticated style to every aspect of its decor as well as its drinks list.Unique marketing efforts like this are nothing new to Dunhill’s China operations, which last year built the world’s fourth Alfred Dunhill “Home” in Shanghai, following London, Paris, and Tokyo. These “Homes” are designed to represent the sort of lifestyle promoted by Dunhill (as well as their products), and function as private clubs that, as Dunhill CCO Sven Gaede said, “are not just retail environments, but will also incorporate ancillary services such as a club, restaurant, spa, and barber shop, as well as bespoke tailor services and Bentley chauffeur services.”
In Shanghai, Dunhill is extending their exclusive marketing tack to appeal to many (primarily male) luxury buyers’ desire for “sanctuaries.” With few places remaining in this bustling city to have a calm drink or relax among other businesspeople, Dunhill is basically importing the old British model of the men’s club to Shanghai, where China has always had its own versions of this. Mixing them together — and throwing retail into the mix — Dunhill is scoring what I would consider a marketing coup. Brand-Lifestyle tie-ins have become incredibly successful in Asia in recent years (Just look at the “Passion for Creation” exhibition in Hong Kong), and Dunhill’s male-centric strategy will probably pay dividends. Their brand is already well-established in China among middle-aged luxury consumers, so they have to go beyond simple brand-building to brand sustainability and flexibility — what works in Shanghai may not work in Beijing or Chongqing.
Posted in Art, Business, China, Culture, Fashion, Investment, Luxury
Tagged alfred dunhill, asia, China, Culture, dunhill, ginza, hong kong, jing'an, London, louis vuitton, Luxury, LV, Paris, passion for creation, plaza 66, shanghai, sven gaede, tokyo
“Overbrim the East” Exhibition Hits Knysna As O Zhang’s Installation Is Featured In Vancouver
Contemporary Chinese artist Zhang Zhengmin will be among the artists featured in the "Overbrim the East" exhibition in South Africa
Two new Chinese art exhibitions are set to open in two very different parts of the globe, reflecting the growing internationalization of contemporary Chinese art. Knysna, South Africa is preparing for a unique traveling exhibition of Chinese contemporary art cooperatively organized by the South African National Association of Visual Arts, The South African National Lottery and the Chinese Embassy in South Africa. This exhibition features works by Chinese contemporary artists Zhang Zhengmin, Cai Guangbin, Lu Yunhua and Liu Guufu and will continue in Knysna through July 11.
On the other side of the globe, another interesting exhibition of contemporary Chinese art has just opened at the Vancouver Art Museum. This site-specific installation by Chinese artist O Zhang will remain open from July 20 to November 29, 2009, and signals the beginning of the museum’s new initiative of 6-month exhibitions, which will be held on a rotating base in the new “Offsite” art space. As Canadian Architect writes, this exhibition by young Chinese artist O Zhang is a great way to christen Offsite:
Posted in Art, China, Chinese Art, Museums
Tagged africa, cai guangbin, canada, CCA, China, contemporary art, contemporary chinese art, knysna, liu guufu, lu yunhua, o zhang, south africa, vancouver, vancouver art museum, zhang zhengmin
Chain Foresees Opportunity In Chinese, Foreign Business Travelers and Tourists Throughout The Mainland
The Wyndham Xiamen is a luxury retreat in this bustling coastal business hub. Graphic © Wyndham Worldwide
The American hotel chain Wyndham Worldwide has opened the doors of its first Chinese 5-star hotel in the coastal city of Xiamen, one of China’s most important port cities and the location from which millions of Chinese emigrated and explored the world starting in the Song Dynasty. Since the 1980s, however, Xiamen has gained notoriety not for being the place from which people left China, but where foreign and government investment money flowed. As one of China’s first Special Economic Zones (SEZs), Xiamen was one of the first cities in China to be allowed to experiment with capitalism since 1949. Over the past 30 years, the city has transformed from a typical port with limited infrastructure to China’s second most livable city, and an increasingly important business and trade locale for foreign and Chinese businesspeople alike.
Wyndham’s choice of Xiamen as the first location from which to gain a foothold in the Chinese mainland, then, is not surprising. Already, a host of other luxury or mid-range hotels are located in Xiamen, including Sheraton, Sofitel, Crown Plaza, Millennium and Marco Polo. As the newest entrant in this market, Wyndham will have to set itself apart — and the company plans to do this by offering a 5-star experience that appeals to its guests’ cultural and/or luxury sensibilities. As USA Today writes,
Hong Kong A&A International’s Purchase Of Controlling Stake In One Of Bordeaux’s Oldest Vineyards Reflects Wine’s Growing Importance, Popularity In Greater China Region
Chinese wine lovers are becoming increasingly enamored with French reds (and the wineries that produce them). Photo © MSN
Today, details were released of Hong Kong investment firm A&A International’s purchase of French winery Chateau Richelieu, a major development in the global wine trade. While the growing interest in wine in the Chinese market is not necessarily new — sales have been rising for several years now — it seems that Chinese buyers and investors are taking advantage of the global economic downturn and accompanying decline in purchases by western and Japanese buyers to get a hold of rare wines (as we saw in recent wine auctions in Hong Kong, where Chinese buyers snapped up every last bottle) as well as make unique deals with vineyards and wine franchises (as we saw with the recent Chateau Lafite joint venture in Shandong Province).
So what will the increased interest in wine by Chinese consumers mean for global wine markets? The assumption is, at the moment, not much — the idea of wine “speculators,” who plan to hang on to their bottles for years, is likely absent in the Chinese market (yet may exist in a limited form in Hong Kong), and as many analysts have pointed out, one thing that Chinese buyers of fine wines do differently than many of their western counterparts is actually drink the wines they purchase.
Posted in China, Culture, Investment, Luxury
Tagged bordeaux, chateau richelieu, China, chinese, drinkers, france, hong kong, Investment, wine
Literary Giant Mo Yan Becomes The Brand Ambassador For Beijing/Lazio Cultural Exchange Partnership, Promoting Chinese And Italian Tourism
Chinese author Mo Yan. Photo © Johannes Kolfhaus
The respected Chinese author Mo Yan has taken on the role of brand ambassador for a new cultural partnership between Beijing and the Lazio region of Italy, promoting stronger cultural ties between the two governments and attracting more travel from tourists in both regions. Mo, who traveled to Italy to create the documentary “Roman Walks: Travel Diary of Mo Yan,” is well-known in China and the West for two of his novels on which the film Red Sorghum was based, and is widely regarded as one of the country’s greatest literary voices. As Zhang Lei writes, Claudio Mancini, president of Lazio Tourism Board, felt that Mo would be a better “face” for the cultural partnership as he brings the perspective of a Chinese intellectual, and “both Rome and Beijing have ancient cultures.” With this appointment, it will be interesting to see if other world cities create more cultural exchange partnerships as a result.
Zhang goes on to note, the huge population and increasing tourist base of China offers huge opportunities for European travel centers, since only about 5% of the Chinese who traveled abroad last year went to Europe. If only 10% went to Europe, travel operators could expect huge revenues even if other tourists cut back:
Posted in China, Culture, Investment
Tagged China, cultural, Culture, italy, lazio, mo yan, partnership, rome, tourism
As Ranks Of High Net Worth Individuals Continue To Grow, Luxury Marketers Need To Adapt Creative Techniques For Chinese Market
A number of reports released this year have identified China’s millionaire class as one of the world’s fastest-growing high-net-worth demographics, outpacing nouveau riche in other emerging economies like India and Russia. With China’s massive economic growth over the past 30 years, and vast population size, this is no big surprise. Unlike their non-Chinese counterparts, this group of wealthy individuals — who are rapidly becoming among the favorites of luxury brands — present unique challenges for marketers who have become accustomed to emerging luxury consumers simply springing for the most expensive items regardless of brand outreach.
Today, an article in PR Inside delves into the still-undefined world of the Chinese luxury consumer — a consumer segment that attracts lots of press but little new insight or clarity. Since China’s wealthy population remains highly stratified, with sophisticated, long-time buyers concentrated primarily in coastal, first-tier cities and newer, first-time buyers spread throughout second- and third-tier cities as well as the odd frontier town, the Chinese market presents a difficult challenge for brand marketers. One-size-fits-all marketing strategies simply will not do in a country the size of China, and the message for Shanghai or Beijing’s consumers won’t translate to other regions.
Posted in China, Culture, Economy, Fashion, Investment, Luxury
Tagged China, Culture, gucci, Investment, Luxury, prada
Influx Of Mainland Chinese Boosting The Island’s Tourism Figures, Benefitted By Relaxed Travel Rules
Mainland Chinese tourists have flocked to Taiwan since travel rules were relaxed in 2008
The global tourism industry has been hit hard by the global economic crisis, as formerly profligate travelers from Europe, Japan, and North America scale back their vacation plans this summer, and the tourism industries in the periphery of Greater China — Hong Kong, Macau, and Taiwan — have been no exception. Macau has responded to this drop in wider demand by reaching out more aggressively to Mainland tourists, who find traveling to China’s special administrative regions far easier than applying for foreign visas. We’ve written on Macau’s outreach strategies, but Taiwan is another market altogether. With the election of Taiwanese President Ma Ying-jeou last year, and ties between Taiwan and the Mainland gradually warming, China issued new travel rules that made the process far easier, and soon after began direct flights to Taiwan for the first time in nearly 60 years.
Since then, Taiwan’s travel industry has benefitted from the influx of visitors. According to this press release, the number of overseas visitors jumped 13.8 per cent in the first five months this year to 1.79 million, most of them being tourists. However, the real meat of the release is that the number of Mainland Chinese visitors has surged even as tourists from other major Taiwan tourism markets have plummeted:
Real Estate Prices Have Fluctuated In China’s Metropolitan East, But Signs Of Recovery Are Starting To Surface
Higher-end apartments in Shanghai appear to be resisting the global economic downturn, increasing in demand and price in the last several months
Although news coming out of emerging markets seems to be more rosy than that of their more developed counterparts, China itself has not been unaffected by the global economic downturn. Prices of hard assets like real estate have been hit particularly hard in some cities, like Beijing and Shanghai, where strong demand over the last several years has created something of a “bubble,” yet not as severe as those found in California or Florida. However, as China’s economy begins to head north again, several real estate experts have written on the resiliance of the real estate markets in China’s most important economic centers. In Shanghai alone, Shanghai Uwin has put out a study indicating that more than 1 million sqm of new homes, excluding those designated for relocated residents due to urban redevelopment projects, were sold across the city during the first 15 days of this month, up 12 per cent from the same period in May. This indicates that the city’s real estate market is, gradually, gaining steam again.
The important thing to keep in mind when trying to conceptualize the Chinese market is that many of the buyers in cities like Shanghai, Shenzhen, Guangzhou, or Beijing are first-timers, and tend to be on the cautious, young side. Since China’s economic power centers are concentrated on the east coast, in only a handful of huge metropolises, real estate is virtually always going to be in relatively short supply and relatively high demand. The population size — and economic and employment realities — guarantees this. So even in a comparatively sluggish market, when many younger people are finding it harder to settle down, real estate in Shanghai and Beijing is still going to perform pretty well.
Posted in Business, China, Economics, Economy, Investment, Luxury
Tagged China, Economy, emerging market, global economic downturn, real estate, shanghai, uwin