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KAI RYSSDAL: Today the International Monetary Fund cut its estimate of global economic growth for the year that just ended. Not by much — worldwide gross domestic product was still close to 5 percent growth. China drove a good chunk of that. Its economy is running flat out. Which is creating a lot of wealth there. The number of Chinese millionaires has doubled in just six years to 300,000 of them. There are 106 billionaires in China. And for those with a fist full of dollars, there are plenty of people to show them how to spend it. Marketplace’s Scott Tong took a trip to a trade fair featuring the finer things.
Scott Tong: The point of the VIP weekend is to give China’s nouveau riche a taste of the good life. That is, as defined by the sponsors of the weekend — companies selling cigars, cognac and sports cars trying to cash in on the world’s number three luxury goods market.
Aemy: China booming, and we want to know where all these rich people are hiding.
TONG: Generally, what kind of people are here?
Thomas: Mainly, those people … rich people of course, ha ha ha!
Publisher: In China today there is a lot of money flowing around.
Aemy: These rich people are here, and there we are to teach them how to spend their money.
“These people” include property developers, nightclub owners, bankers. They’re all in Hunan province, inside a European-style chateau on the grounds of the air conditioning company called Broad. The founder is Zhang Yue, millionaire. He owns a mansion and a jet.
Zhang Yue (translation): We have a very serious problem. China’s rich people today don’t understand the good life because they’ve worked so long. They have no refined experiences.
Refined, he says. Here, two women in leopard print bump and grind to Britney Spears.
Zhang is a corporate jet evangelist. He bought China’s first ever a few years back. Exhibitor Richard Cocu of Globaljet explains a private plane is a must-have for today’s globetrotting Chinese executive.
Richard Cocu: By example, they are arriving in Paris, they want to go to Cannes, then to Geneva. Then they have an appointment in Spain or Portugal. So it’s very easy for the private yet.
Want to smooth out that flight? Hit the Martell cognac station — 300 bucks a bottle.
It’s $6,000 for their Glashutte original watch — wrapped around the wrist of this model. She’s sashaying. If there’s a dominant theme here, it’s European brands.
Olivier Burlot: The hermes, the cartier, the zegna….
That’s luxury magazine publisher Olivier Burlot. In just about any conversation, he transitions seamlessly from fashion, to yachting, to wine — giving life tips along the way.
Burlot: Especially, we had a Margot 94, a Chateau Ferrir.
It may seem over the top for this nominally socialist country, where the annual income per capita is $2,000. But billionaire property developer Wang Shi says the party officially embraced entrepreneurs six years ago.
Wang Shi (translation): The party does not only represent the workers and the farmers. It also represents intellectuals and capitalists.
And fellow capitalist Jason Fan says what’s wrong with us living a little? Just a generation ago, virtually everyone in China was dirt poor.
Jason Fan: Thirty years ago, your dream is to own a bicycle. Twenty years ago your dream is to own a motorcycle. And 10 years ago, your dream is to own a car. Today, your dream is to own a private jet.
Still, spending freely on imported goods doesn’t necessarily come easily to many Chinese who have spent a lifetime being frugal. Market researcher Paul French says luxury retailers may think they can just take their success in Japan, and copy and paste it in China.
Paul French: A lot of us don’t believe that. For the very simple reason that if China historically always followed Japan then everyone here would be a Zen Buddhist and women would wear the kimono. And we’d all eat sushi every day.
Still, some items — like luxury cars — move almost as quickly as iPods the day before Christmas. This sports-car test drive yielded this interested party.
This property developer wants to pick up a Jaguar for his wife — the red one, 90 grand. “It’s a good price,” he says. “Not too high. I don’t want to be too showy.”
In Hunan, Southern China, I’m Scott Tong for Marketplace.