The Strong Purchasing Power Behind The "Uptrend" In The Luxury Market

Why do the rich people prefer to "buy villas to grow grass"? The experts believe that this "strange thing" highlights the importance and urgency of opening up and widening the investment field and allowing private capital to play a greater role in domestic economic development and economic security.

Although the number of rich people is small, they are rising rapidly in China.

It is not only their path to create wealth, but also their way of consumption, which is easy to arouse social concern.

Hu Run, chairman of Hu Run riches, said he liked to call some billionaires with the term "China's new aristocracy".

In his eyes, a billionaire house in Beijing often consists of three home ownership houses, a suburban villa in Beijing, a Premium Apartment House in downtown area and a quadrangle courtyard.

His residence may be based on the famous painter Matisse.

According to the survey of "Hu Run rich", the new aristocrats in Beijing spend 6 million 880 thousand yuan a year. The watches worn by the male hosts are often Patek Philippe, the clothing brand is Giorgio Armani, the favorite super luxury business car is Rolls-Royce phantom, while the hostess likes wearing Bulgari Bhai Gold Diamond Watch, driving the BMW open roadster, and about 35 friends gathered in Beijing orchid club, and also from time to time to go abroad to play.

In addition, they purchase a large number of luxury brands such as MontBlanc, Cartire, LV, Zegna and so on every year, which is also a great expense.

Rich class

Strong purchasing power of China's rich

Affected by the global financial crisis, international

CEO Ouyang Kun, China Representative Office of the World Luxury Association, believes that under the background of the global luxury market's weakness, Chinese consumers' enthusiasm for luxury consumption has not diminished, and luxury consumption has been constantly upgrading in China.

It is estimated that in the next 5 years, China's luxury goods market will reach US $14 billion 600 million, which will occupy the pinnacle of global luxury consumption.

The popularity of luxury goods stems from the rise of the rich class.

Ouyang Kun believes that in the past ten years, a number of top rich people have emerged in mainland China, and the rise of luxury goods is evidence of the rise of the new rich class.

A report on China's multimillionaire by the Hurun Research Institute shows that 25% of the surveyed rich people spend less than 1 million yuan a year, 57% of the rich spend between 1 million and 3 million yuan a year, and 18% of those who are more than 3 million yuan.

The biggest consumption of the respondents was luxury, which directly led to the popularity of the luxury consumption market in China.

Take luxury cars for example.

According to Xu Di, Minister of marketing and marketing of China Automobile Trading Co, in the industry, the concept of luxury cars is more than 2 million yuan per vehicle and brand, including Bentley, Ferrari, Rolls-Royce, Lamborghini and other seven brands.

Before the financial crisis, luxury cars grew rapidly in China, almost tripled, and sales were affected after the crisis.

In 2009, sales totaled 1000 vehicles in 1~10 months, with 750 vehicles on the license plate, representing a decrease of 20% over the same period last year.

In foreign countries, the consumers of luxury cars are generally over 50 years old, while domestic buyers are mainly "rich two generation" and private owners.

They usually pay for the payment by one-off card, the lowest price is about 2000000 yuan, and the maximum is over ten million yuan.

In luxury Hangzhou Tower, luxury goods sales in Hangzhou have increased by two digits in recent years, reaching 3 billion 800 million yuan in 2009, and 50 thousand square meters in the luxury brand area.

According to Tong Minqiang, executive vice president of Hangzhou Tower, at present, 80% of the world's luxury brands are stationed here. The 100 square meter "Zegna" brand store sells more than 70 million yuan a year; OMEGA watches have a sales volume of about 1 hundred million a year; about 1000000 yuan watches are sold out at the counter, and more expensive jewellery has been snapped up.

The sales of Hangzhou Tower LV counters ranked first in the world's LV single stores, and Hangzhou has become the third largest city in the country's luxury sales.

"Buyers of luxury goods at home and abroad are quite different. Foreign buyers are mostly celebrities in the entertainment industry, while in China, a large number of people buy more."

Tong Minqiang said.

"We sell villas just like cabbage."

A wealthy businessman in Jiangxi who likes to smoke is the panda.

But his habit of smoking is very special. He smokes six or seven cigarettes in each cigarette and then rekindle one to continue pumping.

Within an hour of chatting with the correspondents, several packages of cigarettes on the table soon disappeared.

The rich businessman said he smoked not smoke, but felt.

A wealthy merchant in Guangzhou described his table culture in this way: "flying in the sky, climbing on the ground, swimming in the water, I have tasted all my life, and now I am going to pick fresh and rare food."

For these rich people, it is a common thing to spend tens of thousands of dollars on a meal. The cost of this meal is equivalent to the annual salary of a civil servant.

The domestic catering industry has also set up an upscale restaurant club for the rich group. Membership is introduced. Just entering this kind of private occasion, you have to pay tens of thousands of Yuan membership fees every year.

For example, some high-end consumer places in Beijing, a membership card 10 thousand to 100 thousand yuan, unlimited time, spend more.

In Guangzhou, some high-end clubs have a minimum price of 50 thousand yuan per table.

In Dongguan, a rich man married to a girl who had a table for 38 thousand yuan, and invited 100 tables. The wedding only cost 3 million 800 thousand yuan for the banquet.

Hunan girl Jiang Qing is 30 years old. She married a wealthy businessman in Taiwan.

She is famous for world famous brands. "The cost of dressing every year is usually 12 million yuan, and the clothes I wear are at least ten thousand yuan each."

The 10000 yuan clothes are equivalent to three months' income in Guangzhou.

Buying tens of millions of dollars or tens of millions of dollars to buy a luxury car has become the usual spending habits of some rich people.

Some of the luxury cars purchased are not used for driving instead of driving. Some are just for display, or only for occasional occasions.

Shenzhen has a "rich two generation", whose parents are the owners of a listed company in Changchun, and rely on stocks to sell their homes.

He usually doesn't work at all, and buying a luxury car has become one of his favorite hobbies.

To this end, he built a larger private car park before the luxury villa, and parked more than 20 world famous cars. Among them, there were many valuable luxury cars worth 120 million yuan, mostly for collection and appreciation.

In the Songshan Lake Park of Dongguan, an advertisement in the high grade flats is to create a noble residential area in the South China.

The villa sold here is often 50 thousand to 70 thousand yuan per square meter, and the property management fee is 4.98 yuan per square meter. The most expensive villa is 850 square meters plus 1000 square meters of large garden, with a total value of 34 million yuan.

Such an expensive villa was sold out at the opening, and some buyers bought several sets at one go.

The sales girl said, "we sell villas just like cabbage."

But most of these villas are idle, and the rich are self mockery as "buying villas for grass".

For this reason, some rich people explained that, anyway, money is also placed.

In Shanghai, there are "expensive houses", 200 thousand yuan per square metre, "one hundred million yuan" villa.

In the high-grade residential areas such as Nanhu, Guangzhou, some of the villas are luxurious to the top. Some top villas have been sold for 160 million yuan, with helicopters and famous cars selling.

In a rich villa on the peak of Xiaomeisha, Shenzhen, a toilet is worth 200 thousand yuan, and there are 8 bathrooms at home. The cost of toilet in this villa is up to 1 million 600 thousand yuan.

In Beijing, a deputy general manager of Finance Companies, who did not want to be named, "often wallow in the circle of the rich", said that Beijing's rich people are still popular with horses.

The rich people spend hundreds of thousands of yuan to buy pure stud horses in England or Australia. They are employed by special people in the racecourse of Shunyi District, Beijing, and bring their family members and friends to ride horses on weekends. The cost of horse feed is only about ten thousand yuan a month.

Some rich people prefer mountaineering expeditions, such as climbing Himalaya Range once, and the total cost of equipment, logistic support and accompanying personnel amounts to 500 thousand yuan.

Why would you rather buy a villa for grass?

Why are the rich people so keen on luxury goods? Dr. Lu Xiao, assistant director of the marketing and luxury management project of Fudan Italy, and the assistant professor of marketing department, School of management, Fudan University, believes that choosing the most powerful luxury brands is not only a way to improve the quality of life, but also a tool for Chinese industrialists to prove their strength and ability to the outside world, because they have been under the suspicion of many social doubts since the first day of development.

In addition, giving gifts and entertainment with luxury can help social interaction and promote business.

Ningbo, a 38 year old rich man, said: "many times we have to use the best brands, otherwise the outside world will doubt our strength.

We are not state-owned enterprises, nor foreign capital.

To let partners and people around us see our strength, we must drive Mercedes 600 to talk about things.

Another 45 year old rich man said: "I buy international luxury brands, except for my own use, mainly to my business partners, such as scarves, belts, watches, handbags, wallets, these small international brands, to buy the most famous, and the price tag must be retained."

Lu Xiao believes that for the rich, there are not many channels for the whole society to value their social contribution. They are eager to show a social image different from ordinary people. This is the social foundation for luxury to become a status symbol.

In view of this, the government should guide the rich to fulfill their social responsibilities, actively participate in public welfare undertakings, and provide more platforms for the rich to gain social identity.

At the same time, we should guide the whole society to carry out rational material consumption and advocate healthy consumption culture.

Why do the rich people prefer to "buy villas to grow grass"? The experts believe that this "strange thing" highlights the importance and urgency of opening up and widening the investment field and allowing private capital to play a greater role in domestic economic development and economic security.

At present, we should further open up access to some industries, lower the threshold and attract private capital to enter.

Wenzhou is one of the most active areas of private capital in the mainland of China.

According to Zhou Dewen, President of the Wenzhou SME Promotion Association, at present, Wenzhou's active private floating capital has reached about 750 billion yuan, but most of them remain in the banking sector.

At present, the balance of bank deposits in Wenzhou is more than 500 billion, but at the end of 2008, the figure is only about 300000000000 yuan, indicating that after the financial crisis, a large number of private capital flows back in Wenzhou, but many business owners are still on the sidelines.

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Zhou Dewen analysis, the current cash outlook is mainly due to the uncertainty of the prospect. After the financial crisis, many enterprises, including the Pearl River Delta region and the Yangtze River Delta region, face the task of industrial upgrading and pformation. However, most enterprises still have no definite direction for upgrading and pformation, and in the current economic situation, although the external demand has improved, the profits of various industries have been greatly reduced. The profit margins of some industries have dropped to 2% to 3% lows, and the owners' confidence in continuing to invest has not been enough.

In 2009, Luo Weiguang, chief investment officer of sunshine private placement fund and Guangdong New Value Investment Co., Ltd., combined with recent performance in capital market, pointed out that banks began to control credit in January. Stock market investors were worried about the decline in liquidity, leading to a continuous decline in the stock market, but the bond and corporate debt index rebounded sharply, indicating that the interbank market was full of funds, and a large amount of capital still remained in the interbank market and it was difficult to find investment channels.

At present, a new trend of private capital investment is to tend to abandon industries and make quick profits.

Zhou Dewen said, it is worth noting that from the perspective of capital flows in Wenzhou, although investment in emerging agriculture and high-tech enterprises has gradually become the focus of private capital investment in Wenzhou in recent years, private capital is more interested in investing in the financial sector because of the uncertainty of policies and the uncontrollable future. With the development of economy in recent years, the financial industry, which originally belonged to high monopoly and relatively high profits, gradually opened up, including the reform of local banks, the reform of credit cooperatives and the establishment of small loan companies, which provided new channels for the flow of private capital.

According to Zhou Dewen's estimate, at present, the total amount of capital invested in venture capital, equity investment and other financial industries in Wenzhou is at least 100 billion yuan.

He Simo, chairman of Dongguan EAST large power supply Co., Ltd., said that among the 10 entrepreneurs, 4 have emigrated abroad, and 3 have withdrawn from industry to invest in the capital market. Only 3 people are continuing to manufacture.

Another area where private capital tends to invest is the property market.

Zhou Diyu, Secretary General of Huzhou chamber of Commerce in Shanghai, told the reporter that because the main business situation was not good, the owners of private enterprises in Zhejiang increased to speculation and speculation in Shanghai in 2009. Most of the real estate owners used their own funds. Some people used private lending to raise funds for Shoufu, but all of them made use of the high leverage ratio of banks to achieve "42 calls".

He said that many owners of private enterprises believe that the RMB appreciation should be external, and inflation will be internal. The economic efficiency of the enterprises will not be improved for the time being. Now the capital of the first tier cities will be pferred to the mainland real estate market after the cash sale, especially in the three tier cities such as Jiangxi, Guangxi and Sichuan.

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Zhou Diyu said that after the wave of investment boom in 2009, many owners of private enterprises have changed their minds.

He worried that the money flowing into the property market would be hard to return to industry for a while. In the short term, the "gold absorption effect" of real estate is difficult to change.

Limited channels for charity

In the mainland of China, the atmosphere for the rich to devote themselves to social charity has not yet formed.

On the one hand, China is one of the three largest luxury consumer markets in the world; on the other hand, the rich class has limited donations to charities every year.

This huge contrast highlights the flow of social wealth and is hard to eliminate the gap between the rich and the poor.

According to different people, in recent years, Chinese wealth groups have increased their charitable activities, and the sense of social responsibility of private enterprises is also increasing, but the whole is still weak.

In the 2009 Hurun charity list released by the Hurun Research Institute last year, 100 Chinese billionaires came to the list, and nearly 15 billion 700 million yuan was donated in five years.

Among them, 78 billionaires were selected in the 2008 Hurun rich list.

The 100 riches donated 160 million yuan on average, accounting for 4% of the average wealth of the 2008 Hurun rich list.

Hu Run said: "the Wenchuan earthquake has deeply affected the charity process in China, and the sense of charity and social responsibility of Chinese entrepreneurs has been promoted collectively.

But compared with the average wealth of the 2008 richest rich list, the potential of private entrepreneurs to develop charities is still great.

Many entrepreneurs in Wenzhou say many of the reasons why the rich do not go to charity include: first, they do not want to be rich, for fear that their lives will be threatened.

Two, some rich people lack sense of social responsibility and social morality.

Three, some rich people want to give back to society, but they feel that there are limited channels for charity.

Xu Yongguang, deputy director general and Secretary General of Nandu public welfare foundation, believes that the use of private donations is often mixed with the financial resources of the government. This confusion leads to the government's strong function in philanthropy, and charitable donations can not finally reflect the status and role of non-governmental public welfare.

This is inconsistent with the reform trend of the pformation of government functions, and also inhibits the growth and development of non-governmental charitable forces, and reduces the productivity of charitable industries.

A survey conducted by Lu Xiao and others showed that among the 792 private entrepreneurs with more than ten million yuan in personal assets, they were opaque to their charitable donations, and 64.2% of them were not satisfied. 9% of the respondents did not contribute very much.

Zhou Jiangong, editor in chief of the Chinese edition of Forbes, believes that donations from Chinese entrepreneurs are becoming more rational. They actively explore and launch non-public fund foundations, and consider carefully whether donations will be donated to other public welfare organizations arbitrarily and freely.

"Surplus and insufficient compensation"

In 2009, the Zhejiang Academy of Social Sciences conducted a survey on "social relations and social stability" in Zhejiang province. The results showed that in the three major factors affecting social stability, the gap between the rich and the poor ranked second, second only to "corruption" and ahead of "social order".

Yang Jianhua, the head of the project, told the reporter that statistics of 1156 valid questionnaires showed that the income gap between urban residents and rural residents reached 7.5, and the income gap of rural residents reached 6.9. The Gini coefficient of residents' disposable income was about 0.42.

"The national conservative estimate is 0.46, and some scholars estimate it at 0.49," Yang Jianhua said.

Generally speaking, the total Gini number is below 0.2 indicating absolute average, and 0.2 to 0.3 is more reasonable. The difference between 0.3 and 0.5 indicates that the gap is large, and 0.5 indicates that the income gap is quite different.

In the survey, 80% respondents, including civil servants, business owners, executives, employees, migrant workers and students, thought that the gap between the rich and the poor continued to widen.

Income and wealth occupy a high degree of differentiation, forming a very obvious high and low income class or rich and poor class in the society.

At present, the disparity of income gap in China is mainly reflected in urban and rural areas, between regions, between industries and between classes.

The proportion of labor income in the distribution of national income is too small, and the proportion of capital gains is too large.

Experts have reflected that the accelerated pace of wealth accumulation and poverty accumulation has resulted in the widening gap between the rich and the poor and the deepening of labor and capital conflicts.

One of the main reasons for the excessive income gap is the ineffective tax regulation.

This is concentrated in two aspects: first, the current tax structure is not reasonable enough to regulate the income gap of residents.

The structural features of the tax system are: turnover tax is heavy, income tax is light, and property tax is relatively absent.

Some scholars have pointed out that in 2007, the turnover tax accounted for about 40.8% of the total tax revenue, accounting for 26.2% of the income tax.

There are relatively few tax categories that directly regulate the distribution of personal income. There is no scientific personal income adjustment system except personal income tax, property tax and travel tax.

Although this tax structure is conducive to obtaining financial revenue, it plays a relatively minor role in regulating the income distribution gap among residents.

In addition, adjusting the tax distribution of residents' income distribution is not scientific and the regulation means is single.

At present, the adjustment of personal income mainly depends on personal income tax, and other taxes which have a significant impact on the regulation of income distribution are seriously absent. In particular, there is a lack of systematic tax adjustment means for the movable property and real estate owned by the residents.

The regulation of personal income tax on high income is limited, and the phenomenon of high income earners paying less taxes is very prominent.

At the same time, the consumption tax is not perfect. Some new high-end consumer items, such as high-end entertainment facilities and high-end housing, are not included in the tax collection scope.

Experts interviewed pointed out that the urgent task is to establish a tax coordination system with multiple taxes and cover the whole process of personal income operation.

For example, when collecting income, we should collect a personal income tax, levy a consumption tax in the consumption link, levy property tax on the property owned by the individual, and finally collect inheritance tax in the inheritance link, so that we can form a complete regulation system for the distribution of income.

In the near future, we need to improve personal income tax, adjust consumption tax items and levy capital gains tax.

Many working people interviewed believe that the key to the improvement of personal income tax is to embody fairness, such as "holiday money", "food paste", "pportation allowance" and so on.

"This kind of tax gives people the impression that they always scrape money from their heads.

The high income earners do not care about this tax, and the cost of living on the basis of our wages is very high. If we take away tens of dollars or hundreds of dollars, it means less consumption.

Wang Youde, a wage earner in Shanghai, said.

Experts suggest that the consumption tax items can be included in the collection of high-end entertainment products such as high-end tonic and health care products, high-end sauna beauty, golf and Cara OK. The structure of the consumption tax rate should be further deepened. It is necessary to reclassify tobacco and liquor products, precious jewellery and jewels, and raise the tax rate for one of the top grade products.

Levying capital gains tax is a very strong voice recently.

Professor Yu Yunhui, a visiting professor at Xiamen University, said that in January this year, the State Administration of Taxation has made clear the collection of personal income tax on the pfer of restricted shares, and on this basis, we can expand the investment tax on investment in the securities market and real estate.

"The wealth of wealth groups is increasingly concentrated in the property market and stock market. This trend is very obvious.

Many people are in the guise of safeguarding the interests of small and medium-sized investors. In fact, few retail investors can make profits in the stock market. Most of the money is taken away by large investors and should be collected by these people.

If a high profit tax is imposed on the property market, it will be immediate for the containment of real estate. "

Many experts say that property tax, heritage and gift tax can be considered in the medium and long term.

Property tax has been brewing for many times in our country. From the experience of the world, it is only a matter of time before the tax is introduced.

The government can not always earn revenue by selling land. After the new demolition Ordinance is implemented, urban relocation will become more and more difficult and the cost will increase rapidly.

Property tax is an inevitable choice, the key is how to operate well, we can consider gradual implementation, the tax rate starts from low, slowly increases with the time ripe.

Gift tax and inheritance tax are two closely related taxes. Gifts are pferred to property before death. Bequest is the pfer of property after death, all of which are property pfer tax. A unified inheritance and gift tax can be implemented. The tax rate should be progressive tax rate, and the progressive and maximum marginal tax rates should be higher than the progressive and maximum marginal tax rates of personal income tax.