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
All Eyes On Chinese Consumer Data, Particularly In The Luxury And High-End Segments, As Consumption In Other Markets Remains Sluggish
China's traditionally high individual savings rate is showing signs of easing somewhat, as middle-class and wealther consumers head back to stores
A number of outlets have given their thoughts on what it will take for Chinese consumers to cut back on their traditionally high savings rate and spend more of their disposable income, with some writing that it will take the creation of a bigger social safety net by the government and others advocating patience and still others defending high savings rates. Today, Susan Weerts writes in Seeking Alpha that data coming out of China this month suggests that consumers there are — without any major need for a socio-cultural shift, spending more on consumer items. This may mean that more confidence in the Chinese economy on the part of the consumer could be largely responsible for more spending in major cities and markets there.
As Weerts writes, the strongest growth in July retail sales was found in furniture, motor vehicles and building/decoration materials, which grew at 42.5%, 32% and 25% respectively, year over year. This massive growth, Weerts proposes, should give luxury brands some cause for (tentative) celebration:
Posted in Business, China, Economics, Economy, Luxury
Tagged China, chinese savings rate, consumers, consumption, GDP, Luxury, savings rate, seeking alpha, shopping, stimulus, stimulus plan, susan weerts
Growth Of Brands Like Gucci, Burberry In The Mainland Shows Growing Faith In Chinese Consumer Among Western Luxury Retailers
Luxury brands like Louis Vuitton have stormed the mainland in the last five years, growing quickly even in second- and third-tier cities, as consumption rates in developed markets slow
As signs that the worst of the economic crisis may have passed are increasingly pointed out by Bloomberg, The Wall Street Journal and others, attention has spread to the beleaguered global luxury market. While growth in this market has come to a screeching halt in traditional markets like Japan and North America as consumers cut back, analysts have predicted that the corresponding rise of the Chinese consumer — a rise that has been expedited by the Chinese government’s rapid shift to promoting a consumer-based, rather than export-based, growth plan — helps luxury brands ride out the ongoing global slowdown. According to many luxury CEOs, the key to their brands’ continued survival and expansion in this market lies solely in emerging markets like Russia and China. So the question has become, will it be enough to keep these brands afloat?
Posted in Business, China, Culture, Fashion, Luxury
Tagged bloomberg, BRIC, China, chinese government, christian dior, consumer, gucci, hennessy, japan, louis vuitton, Luxury, LVMH, recession, russia, seeking alpha, versace, wall street journal