Chinese boost to luxury goods
Updated: 2010-12-10 08:00
The European Union (EU) economy is recovering at a rather slow pace. But its luxury goods' sector has emerged strongly from the global financial crisis, thanks in no small measure to Chinese tourists, says an article in China Youth Daily. Excerpts:
The sale of luxury products in EU markets had dropped because of the global financial crisis. But the EU luxury industry has doubled its sales and profit this year because of booming tourism, which to a large extent has been fuelled by Chinese tourists.
According to a British consultancy company, the number of Chinese tourists visiting Western Europe will reach about 2.4 million by the end of the year, an increase of about 400,000 from last year. The company, which focuses on tax-free shopping, said Chinese tourists spent 99 percent more than last year.
Chinese tourists have helped revive of the EU's luxury industry because of three reasons. First, China emerged from the global financial crisis faster than any other country, prompting more Chinese people to travel abroad.
Second, the Chinese currency has risen against most other currencies, because of which more Chinese tourists are flocking luxury markets abroad.
Third, though almost all EU luxury brands are available in China, Chinese people prefer to buy them abroad because the high tariff imposed on them makes them dearer at home. Besides, they can buy luxury brands abroad without the fear of landing a fake.
But Chinese people's inclination to buy luxury brands abroad is not good for domestic consumption. The National Bureau of Statistics has said that compared with fixed asset investment and exports, retail sales in October has shown limited growth.
The government should encourage people to spend more in the domestic market. It can start by reducing tariff on luxury products. But more importantly, it should take steps to raise the income of the general population to boost consumption at home.
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