China's new millionaires snatching up luxury items

Models stand beside products in a new Louis Vuitton store in Beijing last November. The French luxury goods maker recently openedits flagship store in Beijing, expressing confidence in its ability to attract China's new rich despite rampant piracy of its shoes, bags and other products.

For decades it was a crime punishable by imprisonment or death. Then it became a mere social taboo to be furtively practiced away from disapproving eyes. But now, being wealthy is a cause for celebration, prompting thousands of Chinese millionaires to come out of the closet.

More 20 years after Deng Xiaoping (鄧小平) pronounced the end of communism with the phrase "to be rich is glorious," a generation of self-made tycoons is starting to have the time, the money and the confidence to flaunt their good fortune. They were evident at the Best of the Best gala dinner in Shanghai, where 20 of the wealthiest entrepreneurs joined hundreds of luxury goods providers at an awards ceremony for those judged best able to satisfy the country's most expensive tastes.

Quaffing and champagne in the sumptuous setting of the Pudong Shangri La ballroom, the big players of the world's fastest-growing economy handed out honours to salesmen from leading global brands.

Among the guests were Yan Jiehe, a construction mogul and the second richest man in China with a fortune estimated at ?850 million (US$1.5 billion), and Timothy Chen, an Internet game pioneer, reportedly worth ?790 million. They and 589 people with annual incomes in excess of 10 million yuan (US$1.23 billion) voted on their favorite brands -- all names familiar in the West, but none of which they were likely to have heard of growing up in Mao Zedong's (毛澤東) China.

Their offered a snapshot of the huge change that the country has undergone -- particularly at the top of the income scale.

Among the prizes were favorite sports car: Ferrari; favorite yacht: Princess; best fashion label: Giorgio Armani; best cigar: Davidoff; favorite auction house: Christie's.

Among the few domestic products to get the seal of approval were the liquor maker Wuliangye, search engine Baidu and the 21st Century Business Herald, which was voted best newspaper.

Along the awards came the release of a lifestyle survey, which found that the favorite leisure pursuit of this affluent minority is travel, with Australia, France and Hawaii the most popular destinations.

Golf, unheard of in China 20 years ago, was third on the list. Wine-tasting was eighth -- ahead of spending time with a spouse or raising children -- cigar-smoking 12th and parachuting 13th.

Critics pointed to such idiosyncratic results as a sign of the unreliability of rich lists in China. But what is most remarkable is that such surveys can be carried out at all in a country still ruled by a nominally communist government.

When Rupert Hoogewerf, the founder of Hurun Report, which organized the awards ceremony, released his first Chinese fortune list in 1999 he was widely criticized. In the public eye being rich was associated with corruption. Few people wanted to cooperate and many of the people he outed as wealthy were targeted by tax officials, the media, and even kidnappers.

Now, however, people are more comfortable with their money, he said.

"There has been a revolution in the image of wealth. Twenty years ago it was a dirty word. Now it is a sign of success," he said.

He added: "The first generation didn't want to show they had money. They might buy a fine house, a nice watch and 20 cars, but they would not reveal them in public. The cars would stay in the garage. But today the second generation and successful young professionals are more likely to flaunt what they have."

Cartier's single sale in China last year was of a diamond necklace valued at ?1.5 million, contributing to a 40 percent surge in sales. Cartier's east China regional manager, Josephine Chien, one of the guests at the banquet, said her firm had two boutiques in China in 2004 but now has 11. By 2010 this will have increased to almost 30 and China will have overtaken Japan as the company's second biggest market.

"There are a lot of people who have become rich all of a sudden and they like to wear things that get them recognition. They want to show people they have made it," she said.

It is not the same everywhere. While rich people in wealthy eastern regions such as Shanghai, Bei-jing, Guangdong Province and Zhejiang Province are happy to talk about their fortunes, Hoogewerf said, it is harder to glean information from their counterparts in western provinces, where tens of millions of people are still living on less than a dollar a day.

With income disparities widening, some question whether the publication of rich lists is good for social stability. At a press conference to announce the results of the lifestyle survey, a local journalist asked: "Don't you think this will make ordinary people hate the rich?"

The hundreds of wealthy people who contributed anonymously to the research appear to accept Hoogewerf's argument that openness will ease suspicion rather than foster resentment. Most have first-hand experience of what it is like to be poor.

"Perhaps some people are envious or angry, but I have never really thought about it. I'm a businessman," said Yu Pang Lin, a former rickshaw driver who now uses a large chunk of the fortune he has made from the Hilton Group to pay for ambulances and cataract operations in China's poorest regions. "When I was young we often didn't have enough to eat. Now I have huge assets, but I don't think about it much. I only see it in terms of how many people I can help."