Strong and sustainable growth for the luxury industry in Asia!

Asia as a whole is the heaven for the future of luxury industries more than ever. According to the economist’s views the economic crisis has little effect in the luxury industry throughout the world. For one simple reason: in the crisis, the poor get poorer, but the rich get richer, and the consumption of products they love increases because they have more resources to buy them, while general consumption stagnates or declines. In Europe, sales of luxury goods is expected to increase by more than 6% in 2013, while overall consumption stagnates, the United States will increase by more than 9% worldwide, 10% alone in Asia, excluding China and Japan, the increase in the sale of luxury goods is expected to be 15% and China at 20%, well beyond the expected GDP growth of 7%. This amazing forecast of 20% growth for luxury goods in China was announced on June 11 in Hong Kong by an luxury goods analyst at HSBC bank, in a speech entitled "The influence of China emerging market for luxury goods in Asia, "the French Chamber of Commerce in Hong Kong. Asia, excluding China and Japan, is currently the site of half the growth of sales of luxury goods in the world. The Chinese take an even more important in this area. 75% of revenues from the sale of luxury goods in Hong Kong and Macau are made by mainland Chinese. They are more likely to make the trip to Hong Kong and Macao, as well as Taiwan and Singapore, where they buy luxury goods. When a Chinese travel abroad, he spends an average of 875 Euros in products like branded watches and wine for men, jewelry and readymade garments for women.. No doubt he will reckon with the effect of campaigns by the Chinese authorities against corruption and for a lifestyle of modest appearance. But it seems that for the time being, this effect is limited to only a little lower the price level of goods bought - a watch 4 000 and not more than 10 000 - and especially to moderate the exhibition luxury. The affluent Chinese still want luxury, but a more discreet luxury. To say that the Europe has its part to play in this game and she plays so well. It is further necessary that the luxury industries are not disabled by retaliation against the Customs anti-dumping measures against Chinese solar panels.

The Future Economic Rebalancing Of The World

In 2017, no European country will be included in the top ten contributors to global economic growth. The emerging economies will account for fifty percent of global production of goods and services. According to IMF, in the year 2018 the proportion will increase to 55%. And this is only the continuation of a trend that began there more than thirty years and represents a consolidation in the global economic consequences. As noted by the chief economist of Goldman Sachs who invented the concept and acronym BRIC's in the 1980s when the growth of the Chinese economy was even more important today, a growth rate of China's economy 10% was less important to the world that U.S. growth by 1%. In 2013, the rates of equivalence are 8% and 4%. Today, financial markets are equally concerned of China slowdown as the U.S. recovery. No wonder that, as growth in emerging was much stronger than the rest of the world, and that their standard of living per capita has steadily catching up with the seven most industrialized countries. By the mid-1990s, countries such as Germany and Italy had dropped from the list of top ten countries with the highest growth rates. While in the 1980s, the United States accounted for 30% of global growth and Europe 20%; in 2017 no European country will included in the top ten contributors to global growth. Europe as a whole no longer and will contribute only 6% of it, while India and China will contribute to almost 50%. Even more surprising is the speed at which occurs rebalancing and this because of the masses in. The economic transformation and urbanization of China occur at a scale with the population is one hundred times greater than that of Great Britain at its early industrialization and a speed ten times. Thus the Chinese momentum is 1000 times that of Britain 200 years ago. This rebalancing is a return to the state of the world that existed in the early nineteenth century. But this is only small consolation because it is perceived as a stall and undoubtedly contributes to the gloom in US, as in the rest of Europe.

China takes control of its Currency

The Chinese government has recently reaffirmed its commitment to lead a prudent monetary policy. A message was signaled to all banks and other Chinese companies and foreign business partners. After a recent meeting, the Chinese government issued a statement which reads: "China will continue its prudent monetary policy in ensuring growth of credit to the real economy, the agricultural sector and small businesses." "Will continue", says the text, and in fact, the direction is not new. Publicly adopted in 2010, it is associated with a budget "proactive" policy, in force since 2008. On the issue of the exchange rate of the Yuan, the Chinese government encourages the continuation of the current rate "to a basically stable level." So if the Yuan is revalued, it will be a movement of low amplitude. Already at the end of last year, the new administration had announced their resolution to "expand wisely the amount of social financing to ensure a moderate emissions growth of loans." The Chinese economy is facing a double challenge: The first and foremost one is to maintain a growth rate of around 7% to ensure the increase of the population's standard of living and inflation under control, and the second one is to set right their export market which was seriously damaged by the European debt crisis which considerably reduced its export markets. To answer the western financial crisis, the Chinese launched in 2008, a multi-year recovery plan 4000 billion Yuan. They slowed and the slowdown the growth of their economy, but still fear that the financial crisis in their main customers being turned into an economic crisis, if the growth rate falls more below. The temptation is strong in these conditions, increasing the money supply. They have repeatedly reduced the benchmark interest rates and reserve requirements for commercial banks. But then tip the risk of inflation, which is not only a malfunction of the economy, but also the source of popular discontent, and thus a political danger. This is why banks are expected to deal with the "real economy", rather than seeking sources of short-term profit, spontaneous tendency of any financial institution. In this framework, they will be encouraged to provide loans. They will not be to fuel property speculation. The message is clear to European countries that China needs to export; it has no incentive to engage in any trade war. But it will remain master of its currency.