China’s richest are ‘beginning to show interest’ in luxury yachts
China’s wealthiest are ‘becoming interested in luxury yachts’ – despite previous predictions, which failed to materialise.
China’s wealthiest people are starting to develop an interest in luxury yachts, according to the digital publication Jing Daily, despite the widespread reluctance of Chinese citizens to be associated with ostentatious spending.
“Arguably the world’s largest economy, China’s wealthiest individuals are slowly beginning to show interest in this relatively ‘foreign’ industry [luxury yachts],” claims the publication, which is dedicated to reporting luxury consumer trends in the emerging Asian superpower.
Buoyed by what is reckoned to be the country with the largest number of millionaires, China’s rich are seeking the best in luxury goods, which for years have favoured the car industry and the fashion designer labels. “Of the high number of Chinese high-net-worth individuals [HNWI] (who account for more than 70% of the country’s wealth), only an estimated 0.3% own yachts.”
A range of reasons are attributed to blocking the growth of the luxury yacht sector. “Factors ranging from culture, economic and financial instabilities, and unfit sailing entrances have left the industry comparatively crippled in China and yet to see much development.”
But a key factor blocking the development of luxury yachting is widely recognised to be President Xi Jinping’s crackdown on corruption. This has led the country’s wealthiest to avoid being seen with ostentatious high-value luxury items such as luxury yachts and private jets – favouring investment in equally high-value but unobtrusive and portable assets such as art.
No yachting tradition
Also, in Chinese culture, water is regarded as a ‘yin’ force, meaning negative or dark. With no tradition of boating or yachting for leisure, water is traditionally seen as a means of facilitating transport and food production.
Nevertheless, despite many previous false predictions of an emergent luxury yacht market in the Asian superpower, Jing Daily detects a sea change in how China’s wealthiest view such vessels. “Surveys in China conducted throughout this decade point to some growing interest, with 16% of Chinese HNWI respondents planning to purchase a yacht soon and roughly half expressing some interest in the idea,” the article claims. Unsurprisingly, both domestic and international superyacht builders are keen to develop the market.
Growing interest in luxury vessels is being fostered by new government policy initiatives concerning yachting and marine activity in general. At the beginning of this decade, new liberalised rules for yacht registration and overseas-yachts’ entry/exit procedures, were issued by The Ministry of Transport and the Maritime Safety Administration (MSA), claimed the publication.
More recently, the rules on yacht ownership were relaxed and more-transparent marine traffic rules were introduced. The changes included the allowance of yacht registrations for non-residents.
“All these major improvements are clear indications that the government wants to develop the market, as maritime legislation didn’t distinguish between commercial boats and private ones just a few years prior,” reports Jing Daily.
Aside from personal yacht ownership, the publication suggests growing interest in rental services for private parties – both business and leisure – sightseeing and photography. “Currently, many marinas and yacht clubs are developing such services in the country alongside standard berths and maintenance services.”
There is also interest in exploiting low-cost Chinese labour to manufacture and assemble yachts for export to neighbouring countries in the region. In 2017, aluminium exporting giant China Zhongwang acquired a controlling stake in Silver Yachts, a Perth-based shipyard that produces all-aluminium superyachts, as pictured above.
‘Should not discourage foreign entrants’
“The low demand in the Chinese market should not discourage foreign entrants from pursuing their goal of global expansion into this arena,” concludes the publication. “China is capable of creating its own unique yacht sailing scene. It is more likely that the conventional use of yachts around the world will not flourish in China due to the factors discussed, and the field will require a new vision to alter how yachts are perceived.”
Meanwhile, the growth in personal wealth in China is set to continue to grow, according to research by Boston Consulting Group. There are about 1,700 billionaires worldwide, with 305 located in China, the group’s partner and director, Martin Mendes told the Superyacht Forum, ahead of the Monaco Yacht Show in September. China ranks second in the list of global billionaires, after the US, which has 382.
Worldwide, the total number of billionaires will increase by about 800 in the years up to 2023 from a baseline of 2018; driven by growth in Asia Pacific Region, North America and Western Europe. “More than 40% of the new billionaires will come from China,” said Mendes. In fact, more than half (56%) of the wealth in China is held by its 305 billionaires.
Chinese geography favours yachting
- 11,180 miles of coastline
- 24,800 navigable lakes
- 6,500 islands
- Four major river systems.