British Media coined “Peking Pound” for Extravagant Chinese Purchases and High stakes Gambling Abroad
The big bucks Chinese spend overseas every year reaches staggering numbers. Last year reportedly 56% of Chinese purchases of luxury goods occur abroad, totaling 13,000 million USD. British Media coined a new word—“Peking Pound” for Chinese huge purchasing power. The casinos overseas, also add Chinese in their VIP lists.
British “Peking Pound” splurged £1bn in sales of luxury goods
According to the British Daily Mail reported on 28th December, 2010, wealthy Chinese tourists are expected to spend a billion pounds on luxury goods during sales.
Based on the word “pound”, British media coined a new noun—“Peking Pound” for the pounds Chinese have spent. The booming “Chinese Pound” is anticipated to account for a third of the entire sales of high end goods, such as Burberry, Louis Vuitton and Gucci.
Shopping Malls looks like “Chinese supermarkets”
Many stores in London have appointed Mandarin-speaking assistants to cater to the massive new market. One of the most popular department stores in London, Selfridges has started taking China UnionPay cards– the only domestic credit card available in China, which greatly facilitates consumption. The massive flood of Chinese shoppers makes the shopping mall look like a “Chinese supermarket”.
Jonathan de Mello, analyst of retail business, comments that Chinese have taken the place of Russians and Arabs to become the biggest buyer of British luxury goods.
“Chinese Pound” takes 30% of British Luxury Goods
De Mello said that the booming economy in China provides the luxury goods industry with a big emerging market. The price of luxury goods in China is 20%-30% higher than that in Britain due to its high tariff rate. In the past two years, the exchange rate of pound to RMB slumps by almost 30%, which whets China’s consuming appetites.
According to de Mello, Chinese’s expenditure accounts for 30% of the consumer market of luxury goods in Britain.
The number of Chinese visiting Western Europe this year, according to statistics, is around 25 million, which is a 20% over 2009, and the expenditure has also been doubled.
Chinese lavish 7 Billion dollars in the U.S.
LV, GUCCI, HERMES are Chinese favorite luxury brands when traveling in developed countries. It has been well-known that Chinese travel overseas with consuming purposes. Sun Deming, secretary of China’s Commerce Department offers a list of appalling numbers in light of Chinese tourists’ consumption in the U.S., “The chairman of the China National Tourism Administration told me that there are approximately 1 million Chinese tourists to the U.S., and on average every Chinese spends more than 7000 dollars after tax refund. So the total consumption reaches 7 thousand million dollars.” Just in the U.S. Chinese tourists spend 46 thousand million RMB. The number is even more startling if Chinese expenditures in such developed countries as Britain, France and Japan are included.
Chinese Mainland Tourists spent 54.6 hundred million dollars in Japan
Thanks to the relaxed restrictions on individual travel visas for
Chinese, there was a surge in Chinese tourists to Japan, which became the backbone of Japan’s tourism industry.
In 2010 the total expenditure of tourists overseas in Japan is 292.98 billion yen (24 thousand million Yuan), of which Chinese tourists contributes to 68.2 thousand million yen (54.6 hundred million Yuan), far surpassing Korea in second place.
Recently the Japan Tourism Agency conducted a survey on the consumption tendency of foreign tourists visiting between July and September as a research object. The result shows that Chinese mainland tourists on average spend up to 143.9 thousand yens (11.5 thousand Yuan) among other major Asian countries coming to Japan, taking the top ranking in the “consumption ranking of tourists overseas” with China Hong Kong and China Taiwan both in the second place.
At the Re-opening of Casinos in Rason City of North Korea where visitors are almost all Chinese
According to the Korean media report, starting from its opening two months ago, the gambling house in Rason City of North Korea restarted its business and its clients are almost all Chinese.
Besides visitors from the China’s Yanbian Prefecture, many are also from China’s other cities such as Harbin, Shengyang and Changchun. The ride time from Yanji (a city in Jilin Province) to North Korea only is one and a half hours through customs at Huichun (a city in Jilin Province) and it takes another one and a half hours to reach the casino. Shuttle cars are also provided to cater for Chinese customers.
This casino, according to an anonymous source, was operated by the Hong Kong Emperor Group. After nearly four years’ of business, it was closed down in the end of 2004 as a result of the leaking scandal that a civil servant squandered a colossal amount of public money. This re-opened casino now is still under the charge of the Hong Kong Emperor Group.
From the casino it takes merely a 15m drive to those luxury facilities as five-star hotels and bars, fancy restaurants as well as saunas. In the bars there are prostitutes soliciting clients overtly .
Concerns from China’s commerce secretary over Chinese consumption overseas
To Regain the lost businesses
Chen Deming, China’s commerce secretary put it at the national business meeting a few days ago that Chinese consumptions overseas is where China’s great potentials in consumption lies, but how can we regain those lost businesses?
Attention should be paid to those products unavailable in China
Chen Deming said, “Those who bring back several LV bags, Swiss watches, ipads or iphones after a trip are definitely not real Chinese entrepreneurs but the newly emerging rich.”
Chinese customers’ active consumptions abroad are restrained because of their panic purchasing. “Take the milk powder in Japan where it is said that each people can only buy two packages. I asked our boss is it because of the tension in Japan’s powder supply? He denied and said that it is common in Japan as a result of Chinese tourists’ buying spree of the milk powder in Japan.” Said by Cheng. This situation distresses domestic producers. Ma Xinsheng, president of Shanghai Bailian Group said that attention should be paid to those products unavailable in China. He listed the products unavailable in China including high end products and high-quality products abroad. Therefore, Chen extended his concern that it is urgent “for Yangtze River Delta and Pearl River Delta as well as all the metropolis in China to conduct early research on promoting domestic products, decreasing surplus and meeting domestic needs simultaneously.”
Why high end consumptions are shipping abroad?
As the most rapidly increasing market of the luxury goods worldwide, Chinese buy a majority of high end goods outside it’s borders. Ma Xinsheng, president of Shanghai Bailian Group clearly points out that, “in general, the high tax rates and price of importing high end products have not been settled yet.” Men Xiaowei, who is responsible for promoting industry circulation in China’s Commerce Department says the lost large consumption of high end products should have something to do with the domestic agency system of high-end products, which monopolizes the industry and drives the price higher and higher. “Is there any flaws in this agency system? Does it monopolize the channel? How to break the monopoly? All these questions should be dealt with and it is our responsibility.”
The Latest Statistics
Chinese Consumption of Luxury Goods “Lead the World”
According to the Goldman, China’s consumption of luxury goods is up to 65 hundred million dollars, enjoying the highest growth rate and the largest sales volume for three consecutive years all over the world. Goldman predicted that in the near five years, the number of Chinese luxury-goods-consumers is expected to reach 1.6 hundred million from 40 million of which most are second and third tier city citizens.
From the Perspective of Media Overseas
The Whole World Should Wish China’s “A Good Economy in the New Year”
In one of German newspapers it is said that, “What a year! Nobody could foresee that Germany takes such a short time to get out of the crisis. It has been a long time since the economy in Germany surged like this. The once disappearing word “full employment” comes back again. Thank you, China! It is all because of you, Beijing.”
The article points out that Germany sold a lot of cars to China, the sales volume of some brands in China even surpasses that in Germany, which promotes the substantial increases in Germany’s export industry—as well as in the other economic sectors. “Any nation that cares about its own well-being should wish for a strong China economy in the new year. If this economic engine doesn’t work, it does help the world.” It is said in the article that everywhere in the world Chinese are needed, whether as producers or consumers.