How To Understand China In One Word

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way .. .
Excerpts from A Tale of Two Cities (1859) by Charles Dickens

If you are asked to use one word to describe China, what word will you use? "Undemocratic" because both Facebook and YouTube are blocked in China? "Prosperous" because you have seen the towering skyscrapers and flying high-speed trains in China? "Inhuman" because you have seen the report of Yuling Dog Meat Festival? "Rich" because you have seen crazy Chinese shoppers of luxury goods in world major cities? None of the above could generalize China so easily, but one safe and sure way to describe China is, everything in China is under transformation, which means, nothing in China is completed or perfected yet, nor anything has never started yet.

1. From lack of creativity to full of creativity / From uniformity to diversity
Suppose there are ten phones made-in-China with same inch yet different brands on the table, you can find it easy to think they are just different models under one single brand, because they have almost completely same looks, functions and specifications. Almost every single new change in a new iPhone can invite numerous copied designs in Chinese phone industry, Chinese manufacturers do not even have to think but simply copy their industry leader. The origin of Chinese people's lack of creativity actually can be traced back to ancient Chinese imperial studies in which essays were structured around a rigid, artificial structure. This kind of unnecessarily uniform education system has far-reaching effect on the present Gaokao (Chinese National Higher Education Entrance Examination) which leads to lack of focus on teaching critical thinking and ignoring students' emotions, values ​​and personalities. As a result, Chinese students or suppliers tend to focus only on how best they can take after their counterparts, so they can achieve the same high grades or profit. However, with the rapid development of Chinese economy and society, Chinese people are shifting their attention to the awakening of people's individuality and personality, for example, people are praised for being who they are, expressing what they like rather than merely according to common expectations. So are Chinese products, the world witnesses waves after waves of technological innovation in Chinese industry, that is why Chinese companies including tech giants like Huawei are paying more and more importance to intellectual property.

2. From money-driven to ideal-driven
Chinese people is more or less regarded as a nation with no faith, as generation after generation of people are being taught to believe in socialism and Marxism and regard the religious beliefs as superstitious. But do Chinese really have no faith and have nothing in mind to rely on? Not exactly, Chinese people do root their actions and words in money, family ties and human connection (Guanxi). Though these concepts are not written on the country's textbooks, every Chinese is consciously or unconsciously enacting these essentials in their life. The first a few questions that come to people's mind when talking about a certain profession are: Does that earn you a lot of money? Do you have any relatives or friends of high stature taking care of that line of work? The answers to these questions usually determine how much likely someone can earn respect and achieve success. People care less about what contribution that certain profession does to the other people and focus on more what that profession can earn for the family and themselves financially and respectfully. However, despite everything to the contrary, Chinese people are also changing, more and more people dedicate themselves to solving virtual problems and creating something really revolutionary for the mankind. Examples include Jack Ma who completely changed the way people do business and shopping, Pony Ma who changed the way Chinese people are connected with one another, etc. Chinese people find out that they are too much focused on the material gains and begin the shift their attention to the betterment of environment, science, ways of doing things, and social well-being.

3. From unprofessional to professional
Business lies are not lies. But sometimes Chinese business people tend to abuse this way of communication in business, they are inclined to think they can do everything possible to achieve great business, because they believe whatever that can be done is not wrong, so long as they do not get criminalized easily. Some are looked up to by many others because they can make huge fortunes even if by scamming their buyers or shirking tax in some "clever" manner. They believe the person who makes the most money is the real winner. Sure enough, their way of doing business certainly will not fit the world outside China, that is one of the reasons why many world giant companies find China a very difficult market to fit in, such as Amazon, eBay, Yahoo or even Google. Fortunately, as noted in the beginning of this analysis, nothing in China is perfect yet, but China is also experiencing significant changes in the way of business, more and more companies find out the long term advantages of ensuring transparency, professionalism, good quality, good service and integrity. Take Alibaba for example, Jack Ma's team is vigorously chasing to eliminate faked goods out of Taobao, although the effectiveness is another matter to discuss.

Source by Charlie Lin

Shanghai’s Luxury Hotel Market Heats Up Ahead Of World Expo

Construction Of New Hotels, Expansion Of Existing Chains Shows That Shanghai Is Well On Its Way To Becoming Asia’s Top Financial And Business Hub

The Peninsula Shanghai is designed to emulate the city's Jazz Age style (Graphic courtesy Peninsula Hotels)

The Peninsula Shanghai is designed to emulate the city’s Jazz Age style (Graphic courtesy Peninsula Hotels)

Over the past few years, in preparation for the 2010 World Expo, Shanghai has become one of the world’s top destinations for hoteliers looking to get a piece of the Chinese business and luxury traveler yuan. With upwards of 7 million visitors — mainly Chinese — expected at the expo, newly constructed hotels have added nearly 4,000 five-star rooms to the city’s already vast luxury hotel market. The question is, after the World Expo party ends, will 2011 bring a sustained flow of business and luxury travelers to Shanghai? Or will the city’s massive building boom lead to lingering overcapacity?

Today, the Independent UK looks at the city’s five-star hotel explosion, and discusses how the relatively low impact of the global economic downturn on the Chinese market has given some hoteliers hope that overcapacity is a word they’ll never have to use in major Chinese cities like Shanghai:

The opulent Peninsula, the only new building on the main part of Shanghai’s historic Bund in 60 years, just opened, embracing the city’s Jazz Age heyday with a chauffeur-driven 1934 Rolls Royce Phantom and a Great Gatsby-esque pool.

The Peninsula’s owner, Hongkong and Shanghai Hotels Limited, is making a return to the “Paris of the East” where it was founded after a 60-year absence, but it is facing stiff competition.

Ritz Carltonis building a second hotel here, Hyatt already has three landmark properties and Shangri-La is expanding from one to four hotels.

Conrad, Jumeirah, Waldorf Astoria and the legendary Peace Hotel — managed by Fairmont — are all also preparing to enter the fray, with work done or nearly completed on each property.

It seems as if there is a mix of factors at play in the Shanghai five-star hotel market. On one hand, you’ve got the world’s top luxury hotels tripping over themselves to establish a strong foothold in Shanghai, and on the other hand you’ve got a handful of these luxury hotels working overtime to emulate Shanghai’s Jazz Age style and reputation as “The Paris of the East.” As Shanghai’s luxury market develops further, and further away from a slightly adapted copy of the Western market, we should see more hotels, restaurants, nightclubs and fashion boutiques following the lead of the Peninsula and bringing a bit of the city’s decadent past back to the forefront.

As the Independent article goes on to point out, it’s probably in the best interests of Shanghai’s upscale hotels to be seen not only as expensive and exclusive, but a destination…with Chinese characteristics:

The number of high net worth individuals in China surpassed the number in Britain last year to become the fourth largest in the world, according to research published by Merrill Lynch this month. China passed France in 2007.

China now has more than 364,000 people with more than one million dollars in liquid assets, the investment bank said.

That is a key figure for the luxury hotel sector, executives say — and one that puts them at ease.

“China’s a very big market and there’s a place for everybody and everything,” said the Peninsula’s general manager Paul Tchen.

“With our arrival, we’re providing another option … Choice itself is a luxury.”

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The Chill in US Real Estate

You know things are starting to get dicey out there when even a multimillion-dollar penthouse in Manhattan can not sell.

It sees a developer in SoHo, having just recently finished primary construction for his high-rise condo tower, realized the project's focal point – a $ 45 million, 8,400-square-foot penthouse – was just a bit too much.

"The air is very thin up there in that buyer pool," was the way the builder, Kevin Maloney, put it to Bloomberg .

You'll love the Solomon-esque solution Maloney came up with.

The penthouse has a wonderfully grandiose name: the Summit of SoHo.

Sure, it has its own indoor pool. And yes, it has 23-foot living room ceilings. Plus, it has not one but two private elevators. One goes to the lobby; the other is so you do not have to take the stairs to the penthouse's upper levels (for entertaining, a spa and a rooftop kitchen and grill).

But the stock market cracked hard at the start of the year, with the S & P 500 down 11% at its lowest point in 2016, while Hong Kong's Hang Seng dropped roughly 17%. In recent months, Chinese real estate buyers dropped a disappearing act from realtor offices all around the US And after years of ultra low interest rates and easy lending policies, there's now an excess of iconic luxury living quarters on the island of Manhattan.

The developer's solution? Chop his project's expansive space into two smaller penthouses – an $ 11 million, 3,000-square-foot unit (although at that size, it hardly seems big enough for one's collection of bespoke suits), and a second, 5,400-square-foot unit for a comparatively cheap $ 29.5 million.

I'll keep an eye on it and let you know if either gets a sale or not.

Red Hot Real Estate No More

These days, even the bond rating agencies, ever late to calling the turns in any market, are jumping on board …

Fitch Ratings noted last month that home prices in San Francisco have "risen to a level unsupportable by area income." According to Fitch, that makes the local market overvalued by around 16% – which probably means that you'd need to double that figure to estimate a true "fair value" for this once white-hot luxury market.

Just in the last few days, the National Association of Realtors noted weakening demand among foreign buyers, blaming a strong dollar and rising US home prices for pushing US real estate beyond the limits of affordability even for rich foreigners.

The crash of China's Shanghai Composite stock index (down nearly 22% just since the start of 2016 with nary a bounce) forced many of the country's wealthy elites to pull back on their property purchases. You can see the impact in regional news headlines around the country:

In San Francisco: "At High End, SF's Housing Market Finally Cooling Off."

From The Boston Globe : "High-end housing market cooling off."

In Fort Lauderdale: "South Florida condo market cooling off."

Will it get worse for premium real estate? I think we're still in the early innings.

Uncle Sam's War on Cash (Property Buyers)

The story did not get much media play back in January, but that's when the US Treasury Department and its Financial Crimes Enforcement Network (FinCEN) announced the issuance of "Geographic Targeting Orders" for New York City and Miami.

The "GTOs," according to FinCEN's press release, require "certain US title insurance companies to identify the natural persons behind companies used to pay 'all cash' for high-end residential real estate."

Basically, the people at the Treasury are worried whether corrupt foreign officials or "transnational criminals" may be laundering piles of dirty money through these multimillion-dollar property purchases.

Or is Uncle Sam just worried about the flood of Chinese cash into the American real estate market? "All cash" is actually a synonym for rich Chinese property buyers.

At least, that used to be the case. As we've seen in the "cooling off" headlines around the country, the absence of this class of real estate purchaser is starting to be felt in markets around the country.

An article in The New York Times late last year really brings the impact of Chinese property buyers into focus. When it comes to purchasing a home in America, they pay an average price of $ 831,000 – nearly double what international buyers from India ($ 460,000), Britain ($ 455,000) and Canada ($ 380,000) pay for their homes in the US

In coming quarters, I believe the FinCEN "targeting orders" will likely spell the end of the property-speculation craze among Chinese buyers. The government action may only be limited to New York City and Miami, but it will have a deep chilling effect everywhere. After all, it only takes another press release from FinCEN to announce an expansion into other American cities of its inquiry into the identities of those big-money, anonymous all-cash property buyers.

The trend will take time, with the data trickling onto economists' spreadsheets. But as Chinese elites continue to pull back from American real estate, well, get ready for a "Wile E. Coyote" moment in high-end luxury home prices – and more pressure on the Federal Reserve to reverse its status on interest rates.

Source by Jeff L. Yastine

Diamond Sales Get Huge China Boost

Xinhua Reports 12.7% Rise In Imports In First Half Of 2009 To $300 Million As China Eyes Top Spot In Global Diamond Consumption

Diamonds are becoming more popular -- and accessible -- every year in China

Diamonds are becoming more popular — and accessible — every year in China

Good economic news in China this year has translated to good news for diamond producers, if figures released recently by China’s news agency, Xinhua, are correct. This year, following a nearly 50% decline in diamond sales in the US and 24% drop in Japan — according to China’s Global Times — China has become the world’s third largest diamond market with $300 million in sales through the first half of the year. Although this might sound like a lot, particularly in the context of the global economic slowdown, the Chinese market still has a lot of room to grow. Despite rough figures in the US over the past year, the American market still accounts for nearly half of world diamond sales, so the emerging Chinese and Indian markets will take several years of sustained growth to reach the capacity and consumer awareness of the established American and Japanese markets, a prospect that must please diamond producers immensely.

According to the Global Times, less informed middle class Chinese consumers are likely to be the easiest to reach for years to come, as diamonds are still relatively new to the Chinese market (about as new as the middle class itself). As younger Chinese buyers slowly become more informed about diamond grading and quality standards, the market is likely develop and mature:

Diamonds, once a luxury rarely owned by a Chinese family, has now become a must for Chinese newlyweds. According to [Wang Fei, researcher at the Cheungkei Research Center for Luxury Goods and Services (SITE) in the University of International Business and Economics,] the largest population of diamond buyers is newlywed couples born in the 1970s and 1980s.

They are heavily influenced by western culture, where diamonds are seen as a token for love and loyalty. The second-largest customers are couples born in the 1960s who are financially more capable of affording a diamond than they were 20 years ago. The last group to buy diamonds are those who see the investment value in diamonds, which becomes clear in the economic downturn where currencies are depreciating faster than ever.

Although a rapidly growing market, Liu of GAC points out that the current diamond market is not a mature one, saying diamond consumption in China is still for sensational reasons. A true mature diamond market should be one driven by the diamond’s investment values, Liu said.

The maturation of high-end markets in China really is shaping up to be one of the big potential stories of the next 10-15 years, as articles about everything from diamonds to automobiles indicates. It seems that the key factor in the development of China’s luxury market is the dual growth of consumer education and home-grown luxury companies. As Chinese consumers become more familiar with diamond standards and Chinese companies increasingly gain market share by appealing to the cultural design aspects most coveted by the domestic audience, we should see not only more diamond purchases in China, but also more diamond appreciation — on par with, or possibly exceeding, the appreciation of traditional stones like jade.

No matter what the Chinese middle class ends up buying, high-end consumers still remain some of China’s most devoted diamond fans — a distinction that apparently extends all the way to the top brass in business and politics. From the Christian Science Monitor:

Young married couples are not the only Chinese to show an interest in diamonds. Last week Xi Jinping, China’s vice president and expected successor to President Hu Jintao, visited the World Diamond Center. He walked away with gifts of a two-carat diamond laser-engraved with the Chinese flag and a Chinese flag pin made of 60 rubies and five diamonds.

High-end jewelers are also expected to seek to expand in China as traditional markets elsewhere flag as a result of the economic slowdown. Cartier, a French jeweler and watchmaker, expects that China will become its biggest market within three or four years, CEO Bernard Formas said last month. The firm plans to double the number of its outlets by 2014, according to Mr. Formas.

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Overview Of China fashion industry


The Chinese economy continues its dynamic performance, averaging around 10% growth for the last 5 years. As barriers to entry are reduced, more and more businesses are considering their entry into China. This is in an effort to capture some percentage of the returns generated by China's 1.3 billion consumers.

This series of reports is intended to provide fashion retailers, who are planning to enter China for the first time, with an overview of the Chinese fashion industry. In addition, the reports act as a quick update for companies who have already entered China as it Touches on the industry, trends, brands available, wholesale and retail pricing, type of clothing cutting preferred, consumer behavior and updated regulations. A key challenge when entering China is the different regions in China. Consumer behavior and preferences for food, fashion and lifestyle vary dramatically in these regions. For example, retailers should not assume that products or Fashion styles that sell in Shanghai will also be popular in Xiamen which is in southern China.

The series of reports includes:

Report 1 Overview of China Fashion Industry

Report 2 Regulations: an overview of the regulatory environment in China

Report 3 Regional Analysis: Analysis of the key regions in China from a retail perspective

Report 4 Women's Fashion and Consumer Behavior

Report 5 Teen's Fashion and Consumer Behavior

Report 6 Children's Fashion and Consumer Behavior

Report 7 Men's Fashion and Consumer Behavior

Report 8 Recommendations

Economic Conditions in China

China's economy grew by 10.2% in 2005 and 10.7% in 2006 making it the fastest growing major economy in the world. It is forecasted by the banks (Quarterly Bank reports) that GDP would drop to 8% in China in 2007. (Goldman Sachs), though in our opinion GDP rate may be higher due to increased production and consumption. In 2006 China's urban living expenditure increased at a higher rate than GDP, both on a national as well as provincial basis. Despite strong growth, inflation remains moderate with monthly inflation averaging 1.3% year on year from January to September 2006. It is projected that annual growth in consumer prices will reach 1.8% in the early 2007. This is because higher land prices would impact production costs . Increased investment would in turn feed inflationary pressures.

The government's tolerance of greater Yuan volatility and the higher GDP has caused expectations of further exchange rate reform, which would result in faster currency appreciation. The potential impact would be that foreign clothing brands would find that their prices could have been more accepted in the Chinese market.

Retail Industry in China

Increasing income in China and Government efforts in encouraging consumer expenditure have asserted in rising domestic consumption. Statistics show that total retail sales of consumer goods increased by 12.5% ​​to RMB 6,718 billion in 2005. However, it drops slightly to approximately RMB 6,400 billion (US $ 770b) in 2006. One of the factors is the import quota imposed by US and European Union in 2006 (O & L). However, with the increase in income and domestic consumption, it is expected that the growth rate of retail sales can be maintained at about 10% in the next 5 years (O & L projection & Goldman Sachs Global Investment Report)

China's clothing market has been growing at 7% and is now a USD40 billion industry. Department stores account for approximately 40% of the market. This includes stores like Parkson, Shanghai Bailian and foreign brands like Wal-Mart. Clothing brands sold in these department stores include both international brands like Hugo Boss and local brands like Li Ning, Borne, Joe One. Franchise chains and local individual clothing outlets in China account for the other 60% share.

Profit Margins for retail chains in China are high. Due to the lower costs of manufacturing in China, profit margins by these Clothing brands can be as high as 50.5% for brands like Giordano (2005) and Ports (70.4% in 2005). The cities of influence for fashion in China are Shanghai, Beijing and Guangzhou. In addition locals and tourists travel to Guangzhou, Shanghai, Shenzhen for major fashion brands at cheaper prices. For manufacturing, there are different specialty regions. For example, Ningbo is more famous for manufacturing of bags while Guangdong Guangzhou is especially famous for apparels.

The Different Regions in China

Due to the geographical authenticity of China and the huge variation of economic development between cities, market potential differences from city to city. The table below shows the disparity in GDP per capita, where the wealth is located in the coastal cities. Cities are classified into tiers based on population and per capita GDP, Shanghai, Beijing and Guangzhou are tier 1 cities. Report 3 explores in detail regional differences in the Chinese fashion industry.

Fashion Industry in China

Market Segments

Initially there were two markets for apparel in China:
1. low priced basic apparel sold under local brand names and offered in Chinese department stores, foreign hypermarkets or small family owned specialty chains

2. luxury brands sold either in franchised boutiques or upscale department stores.
Due to the rapid growth of China's middle class a new category has emerged, involving quality brands, both Chinese and foreign, being sold in department stores and specialty stores. Consumers in China's middle class are increasingly sophisticated, demanding higher quality, variety and innovation from their retailers. The new category is highly fragmented and is dominated by specialty casual brands from Hong Kong, such as Esprit (514 outlets), Giordano (644) outlets, Baleno (980 outlets) and Glorious Sun (1,076 outlets). The new segment has significant growth potential as it is affordable to the middle class but positioned at a price point slightly higher than local brands. Prices in Clothing have dropped slightly in 2006. This is due to the increased competition in the fashion industry in China (O & L, 2006).

In recent years there are not only an increase of Hong Kong, local Chinese clothing brands and international brands but also an increase of foreign brands. These brands may be mid sized chains that are well established in their home countries but not out of their countries. Example Singaporean chains like Samuel and Kevin. In addition, there are brands that are created due to the popularity of other brands. Example the clothing brand, Fish, in China has spawned other similar brands like 3 Fishes, Fishes and so on.

Expansion into Second Tier Cities

The retail market is beginning to reach maturity in Tier 1 cities like Shanghai. So the need to accurately target specific consumer groups is much more significant in these areas. As a result retailers are increasingly expanding into second and third tier cities like Chengdu, Nanping, Tianjin. Major Brands like Jean West has now gone to secondary and third tiered cities as well. The attractiveness of these secondary regions is enhanced by the migration from the countryside to the regional cities, increasing the size of the second and third tier urban retail market. This would be elaborated in subsequent reports.

Consumer Attitudes towards Brands

Consumers are highly brand conscious and the fact that one can afford these products is seen as a status symbol. Luxury brands like LV, Christian Dior, are there often often bought when purchasing apparel and cosmetics. For many segments, particularly younger consumers, foreign brands that are well known are still regarded as superior and are seen as a status symbol. Brands that are made in US and Europe are more highly valued than those from Australia, or other Asian countries like Singapore, Taiwan. Due to the high prices, there are also a lot of high end counterfeit clothing and shoe brands in China.

Attitudes to domestic brands have changed as stated owned companies have been privatized and produce better quality products. Brands like Borne, Li Ning, Hong guo are very popular locally. Hong Kong brands like Giordano are also popular though the market share has declined recently. Pride in the nation's accomplishments has resolved in many consumers preferring local brands, all other things being equal. These would be further elaborated in subsequent reports

Consumer Attitudes towards Price

Although Chinese consumers are price sensitive, a recent survey shows that consumers are increasingly concerned about product quality and customer service, particularly with respect to apparel. Accordingly these elements should be emphasized in advertising and promotional material.

Source by Gerry Ong

Artprice: Zeng Fanzhi Is China’s New “#1 Artist”

Auction Sales From July 1, 2008 To June 30, 2009 Send Zeng To The Top Of The List, As Chinese Artists Make Up 16 Of The Top 50 In The World

Zeng Fanzhi is one of China's most interesting and top-grossing contemporary artists of the last 30 years

Zeng Fanzhi is one of the most interesting and top-grossing contemporary Chinese artists of the last 30 years

Artxun (Chinese) reports this week that Zeng Fanzhi — one of China’s top contemporary artists — has gained the title of “Number One” Chinese artist in terms of auction prices over the last year, leapfrogging longtime title-holder Zhang Xiaogang. While some of this may be down to the slower pace with which Zhang is producing new works, Zeng’s growing popularity within China and, ostensibly, among New Chinese Collectors, could have something to do with it. Zeng, who sprang to prominence in the 1990s mostly through his “Mask” series but has since begun experimenting with more abstract pieces, recently sold 5 of 6 pieces up for grabs at Sotheby’s autumn auction of contemporary Asian art in Hong Kong well above high estimates, indicating that his popularity among the primarily Mainland Chinese bidders remains strong.

The Artxun piece, rather than focusing only on Zeng’s auction prices, does an excellent job of looking into the artist himself and some of the personal projects he has undertaken, including the “Zeng Fanzhi Art Scholarship,” which awarded 10,000 yuan to a disabled university applicant in July of this year. From the article (translation by CLCB staff):

Compared to last year’s [Artprice] list, Chinese artists comprised 16 of the top 50 artists in the world, down from 18 the year before. Among Chinese artists, Zeng Fanzhi was the highest selling, surpassing Zhang Xiaogang by 1,010,000 yuan, becoming China’s most “expensive” artist of 2009. Zhang Xiaogang slipped from the top five this year down to #7. Chinese artists who made the top 50 list last year, namely Yin Chaoyang, Liu Wei, Fan Dehai, and Guo Hai weren’t strong enough to make the list this year, although Yan Peiming is expected to enter the top 50. Another interesting thing to look at is Chengdu’s growing power — aside from Zhang Xiaogang, Chengdu-based contemporary artist Zhou Chunya was ranked 17th in the world and #11 in China in 2008, and in 2009 rose 3 places in the world ranking to #14 while rising 6 places in China to #5 there. Another Chengdu artist, Luo Zhongli, ranked #38.

Art helping the disabled: Highest donation by Zeng Fanzhi, to the tune of 350,000 yuan

This year, 45-year-old Zeng Fanzhi is the illustrious representative of contemporary Chinese art. His “Mask” series sold at Christie’s auction for a surprising price of over 70,000,000 yuan, setting a new record for a Chinese contemporary artist. Zeng Fanzhi and [Artxun] actually have some common threads. Artxun and [contemporary Chinese artist Zhou Chunya]’s jointly created “Multicolor Fund” (“五彩基金”) donated some 350,000 RMB to establish the “Zeng Fanzhi Art Scholarship,” the largest single donation. At that time, Zeng Fanzhi expressed in an interview with Artxun journalists that he’s an artist, so he pays particularly close attention to charitable activities directed toward youths with dreams of becoming artists who were seriously injured in the Sichuan earthquake (of 2008). Said Zeng, “When I went through hard times myself, I received help from others, so since I now have the ability to help other people, I’m going to do everything I can to do so.” This July, Deng Yu, who was severely injured in the Sichuan earthquake, became the first recipient of the “Zeng Fanzhi Art Scholarship,” receiving a 10,000 yuan annual scholarship after completing his university exam.


“Bullish” News Gives Chinese Contemporary Art A Shot In The Arm

Some art organizations and galleries have closed [in the wake of the global economic crisis], causing many critics to think the contemporary art bubble’s time has come, but world famous art monitoring organization Artprice found after a survey that there is reason to be “bullish” about the developmental tendencies of the Chinese contemporary art market, and that the Chinese contemporary art market has unexpectedly risen to the third largest in the global ranking. Last night, a Chinese contemporary artist ranked in the top 20 — who declined to give his name — told a reporter that the economic downturn had a major influence on the whole world, not only China, saying, “The data from this survey is a real shot in the arm for the Chinese contemporary art market.”


Chengdu-based contemporary art critic Chen Moze said, “In terms of all of Asia, Chinese contemporary art is worthy of the title ‘Big Brother,’ because there are lots of Chinese artists, and the overall strength is great. Since domestic contemporary art became integrated internationally, and the market got on track, it’s easy to see how an exceptional artist like Zhang Xiaogang can build up global fame after 30 years. [To me] there’s nothing unusual about that.”

"Untitled" by Zeng Fanzhi

“Untitled” by Zeng Fanzhi

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New Business Book Summary Explores the End of Cheap China

China has been the major source of cheap manufacturing labor for companies in first-world countries, but cheap Chinese labor is disappearing. Rising labor and real estate costs are causing production to shift elsewhere. Chinese people have become consumers, which is creating opportunities for savvy foreign marketers. In The End of Cheap China, Shaun Rein-born and educated in the United States, but now living and working in China-shares anecdotes from his personal and professional experience to illustrate the current cultural, political, and economic conditions in China. Rein stresses the importance of understanding Chinese consumers and provides marketing advice for businesspeople who are interested in profiting from China's new and growing consumer classes. He also discusses political and social changes and their international implications, and speculates about the future.

• The era of China as a source for cheap labor is coming to an end. Blue-collar waves are soaring, as is the cost for space. Manufacturing is shifting to other countries.
• China is progressively becoming a nation of consumers. Western companies can sell to Chinese people in a variety of ways, but must understand how marketing to them is different from marketing to Westerners. Companies must learn how to cater to Chinese tastes. Chinese consumers are willing to pay more for safe products.
• China now has a large class of super-rich people. They crave Western luxury products and status symbols. They represent an exceptional market for certain American companies. Wealthy young Chinese women are an especially desirable target market.
• China's rise is creating global shifts in brand dominance and survival. While America now supplies most of China's agricultural products, Chinese brands, such as Lenovo, are becoming popular in America.
• The Chinese government is most concerned with stability and the economy, as opposed to spreading its ideology or imperialism. To preserve stability, it must address major domestic issues, such as food safety; unaffordable healthcare; political corruption; inhuman housing conditions and lack of affordable housing; and a misguided educational system.

In The End of Cheap China, Shaun Rein offers a unique perspective as a businessman who has lived and worked in China. The main section of each chapter is a lengthy anecdote or a collection of anecdotes that describe China's past and present and where it might be headed; the end of each chapter provides marketing advice in sidebars. The Chinese market and how it differs from Western markets is a central theme. The book would be of interest to businesspeople who want to know how to do business in China and how to market to the Chinese. It would also be of general interest to readers who want to learn about the evolution of China. The content is divided into topics, which could be read in any order.

Source by Alyssa Gigliotti

The US Real Estate Faces a New Crisis

This time last year, my wife called me and said the four words no husband ever wants to hear …

Honey, we have termites.

I should not be surprised. I mean, we live in Florida – everyone gets termites here. The pest-control guy had found the clue – a few bug wings. But where was the nest?

I found it soon enough, up on our second-story deck. The structure's made of concrete, but the decking itself? Yep – plywood. Just walking around up there, you've never see it. But the critters had bored a little hole through the tarpaulin sheathing, steadily chewing away the wood underneath.

It's not like the new US real estate boom. It appears a bedrock of economic strength. But as I'll show, events far away – in China – are now weakening this market in subtle, powerful ways, with repercussions for the US economy itself.

When people talk about the rebound in US real estate, they are talking about luxury homes. It's the hottest, most lucrative end of the market. Sales for homes priced above $ 1 million rose almost 9% last year, more than double any other price category, according to the National Association of Realtors (NAR).

Buyers from China are the ones setting those record prices. How?

One is sheer numbers. Chinese buyers account for nearly a third of all home purchases by foreigners in the US (and nearly triple those of Canadians, the next closest nationality group).

Two, Chinese buyers are more than happy to pay above top dollar – their median purchase price is $ 523,000 – more than twice the US average.

Three, cash is king – and Chinese homebuyers love cash. According to the NAR, 76% of Chinese purchases were all-cash transactions.

First Australia, Then US?

But what happens now, after a 40% crash of the Shanghai Composite Index, and a still-slowing Chinese economy?

If you read the headlines, the "expert opinion" is uniformly bullish on what China's woes mean for US luxury home purchases. The rationale is that further weakness in China will only spur mainlanders to buy more US real estate, not less.

To me, that sounds like bubble talk. I heard similar rationalizations when I was a financial journalist, covering the boom and bust of the US housing market.

Perhaps America's luxury home realtors should look to Australia, where Chinese property buyers also drive up luxury home prices to insane levels. More recently though, sales have started to tail off in the places where Chinese buyers are most active – the two largest cities, Sydney and Melbourne.

And Morgan Stanley, in a recent note, became the first major financial institution to declare that Australia's housing cycle has peaked. The bank's analysts expect "further declines in auction clearance rates (ie sales) and house price momentum, with a negative impact on construction occurring over 2016."

Could the US luxury home market not be far behind? The anecdotal data certainly points in that direction.

Realtors in the San Francisco Bay area now tell local media that buyers from China are hitting the "pause button." Another said she's seeing price reductions among her high-end ($ 3 million and up) properties. A Sotheby's agent told KCBS-TV, "It's been a little slower now. I feel like there's been some kind of shift."

In Miami, where Chinese buyers were a rising force in the marketplace, luxury home sales fell 10.6% in the most recent quarter. The number of lists keeps rising too – up 15% from year ago levels.

Recession Risks?

Even the Chinese themselves may be seeing the writing on the wall. I ran across an article on a Singapore-based website aimed at high-wealth, English-speaking Chinese recently. The title of the article? "Now Is Not The Time to Buy in San Francisco."

The national data also raises an interesting point. In a midyear report, noted that the total number of foreign buyers of US real estate fell 10% in the 12-month period ending in March. Yet the dollar volume of their transactions (we're talking residential sales here), rose 13% to a record $ 104 billion.

Translated, it means fewer buyers chasing higher prices. To me, that says "bubble."

So let's say I'm right, and that bubble has peaked. What does it mean?

Morgan Stanley, in its recent call on Australia's Chinese-fed housing bubble, believes the coming US real estate slowdown shows the risk of a recession in the Land Down Under.

Could it happen here too?

Considering so many of these homes are purchased for cash, the risk to the banking system seems minimal.

On the other hand, homebuilders have not been this confident in years. This summer, the Wells Fargo / National Association of Home Builders sentiment index hit its highest level since November 2005 – just before the US real estate sector went over the cliff.

Likewise, the boom in luxury residential sales spurs a Field of Dreams mentality ("If you build it, they will come") among builders and developers. That means lots of speculative development, and ever larger orders for lumber, concrete, premium windows, cabinets and lots of other high-value building components.

What happens if real demand does not meet expectations?

It's just another sign, as Jeff Opdyke has stated often, of a US economy left with very few "legs" for support.

Source by Jeff L. Yastine

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Jing Daily compiles the best in Chinese luxury, culture, business, arts, and investment news from around the world

NEW YORK – November 5, 2009 – Jing Daily, the source for the most important and timely news about the business of luxury and culture in China, today announced the launch of its new website ( With insight and commentary gathered from the Chinese- and English-language blogosphere and top news sources around the world, Jing Daily offers up-to-date information about crucial developments and current trends in China’s luxury, business, arts, and cultural markets.

With a middle class now roughly equivalent to the entire U.S. population (and growing), China’s consumer market is among the world’s largest. But for Westerners looking to do business there – or simply understand the contemporary culture – China can be a confusing, extremely fast-paced, and at times contentious place. Published in English and Chinese, Jing Daily cuts through the clutter to focus on the intersection of luxury and culture in China: the ins and outs of business development with an eye toward the upscale consumer market, as well as the business of culture – from auctions, museums, and contemporary art to performance, publishing, and public events.

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“China’s high-end and cultural markets are among the most dynamic and fast-changing in the world,” said Larry Warsh, publisher of AW Asia. “Jing Daily is a concise resource for individuals and companies whose interest in China extends beyond simple economics and encompasses contemporary Chinese culture in all its complexity.”

With original interviews, commentary, book reviews and videos, along with a proprietary “Media Roundup” gathering the latest China news worldwide, Jing Daily is designed for anyone looking to stay on top of luxury and culture in today’s China.

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