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Shanghai's young high rollers splurge on luxury
by Staff Writers
Shanghai (AFP) Sept 23, 2011

WTO cuts 2011 world trade growth forecast to 5.8%
Geneva (AFP) Sept 23, 2011 - The World Trade Organization on Friday cut its 2011 trade growth forecast to 5.8 percent from 6.5 percent as earlier predicted, amid increasing economic uncertainty.

"Members must remain vigilant. This is not the time for go-it-alone measures. This is the time to strengthen and preserve the global trading system so that it keeps performing this vital function in the future," warned Pascal Lamy, director-general of the WTO, in a statement.

Trade volumes in developed economies are now projected to grow by 3.7 percent for 2011, as opposed to the 4.5 percent predicted in April.

For developing economies, full year trade growth is expected to reach 8.5 percent, down from the earlier forecast of 9.5 percent.

WTO economists said that since their previous forecast, "developed economies in particular have been buffeted by strong headwinds, including the lingering effects of the earthquake and tsunami in Japan, the prolonged budget impasse and credit downgrade in the United States, and the ongoing euro area sovereign debt crisis."

Poor output and employment data have also hammered consumer confidence and contributed to the turmoil in the financial markets.

The economists also warned that the current forecast still carries "an unusually high degree of uncertainty" as it is made on the assumption that trade would slow down instead of declining drastically.

On the upside, the economy may see a pick up in growth if policymakers are able to find credible solutions to the debt crisis.

"On the other hand, policy missteps could trigger wider instability along the lines of the crisis that followed the failure of Lehman Brothers in 2008," it said.

"Weighing these factors, we believe that risks to the forecast are firmly rooted on the downside but we should not ignore the fact that there is some upside potential," it warned.

Kelly Ying, one of a swelling group of young high-rollers in Shanghai, has just treated herself to a birthday present of a $45,000-dollar watch.

But the 30-something -- who likes "big watches" -- has elected not to wear what she calls her "PP" (Patek Philippe) today, opting instead for an imposing, gold-plated Rolex Daytona that she bought for her previous birthday.

Thousands of rich Shanghai residents like Ying have turned China's most cosmopolitan city into the luxury capital of a country that is expected to become the world's largest market for the sector between 2012 and 2015.

According to the World Luxury Association, Shanghai topped China's luxury market in 2010-11 with 18.3 percent of overall sales, ahead of Beijing's 16.2 percent and the eastern city of Hangzhou, with its 13.4 percent share.

Second and third-tier cities in the country -- which Forbes magazine says has 146 dollar billionaires, second only to the United States -- are still far behind, despite boasting a growing number of wealthy people.

"Shanghai is certainly the city where most (luxury) brands have their headquarters," Angelica Cheung, editor of Vogue magazine in China, told AFP.

"There is a tradition -- already in the twenties and thirties, Shanghainese were more into dressing stylishly," she said.

According to Cheung, Shanghai is also a "commercial city", and for a long time, Beijing's real-estate market was not ready for large luxury malls, even if that has now changed.

Shanghai counts 132,000 residents that have more than 10 million yuan ($1.6 million) at their disposal, and as such has a reservoir of customers who can spend a fortune on luxury goods -- with French and Italian brands in the lead.

"I'm a fashion victim... and I'm a shopaholic," jokes Ying -- the owner of a modern art gallery -- standing tall on five-inch heels, sporting an elegant peach-coloured pair of shorts and a silk blouse.

Ying -- who also has a 600,000-yuan diamond engagement ring she qualifies as "not very expensive" on her finger -- says she has dozens of bags and lots of luxury clothes.

"Every three months, I empty my closet and give out bags, accessories... Fashion changes very fast," she said.

"Shanghai people have a better sense of fashion, luxury customers are more sophisticated, so you need to do a lot more marketing and merchandising."

The French label Hermes last year chose Shanghai to launch Shang Xia -- a luxury brand that incorporates a blend of traditional Chinese craftsmanship and contemporary design.

Last week, Patrick Thomas, head of Hermes, said Shang Xia's results were "largely above expectations" even if the brand has yet to make a profit -- with 60 to 70 percent of its customers Chinese.

At the city's most luxurious shopping mall -- the Plaza 66 -- young saleswomen wearing black dresses, their hair done up in buns, and security men with ear pieces and white gloves welcome clients.

On its five floors, the world's most prestigious brands -- from Dior to Chanel, Prada to Versace, Armani to Louis Vuitton, Hugo Boss to Bulgari -- compete to attract the attention of Shanghai's wealthy.

"We don't feel the impact of the crisis," says the director of the Tod's store, who only identified herself as Judy.

This is confirmed by Nicola Adamo, guest relations manager at the Dolce & Gabbana shop. "What most of them want is brand names. Money is not a problem, and if they like the brand, they can spend 100,000 yuan," he said.

Adamo said one customer once spent $68,000 in one go. "They come for a total look, not just a pair of jeans," he added.

Consultants KPMG said in a recent report that one unique characteristic in China was the high number of young millionaires -- "far younger than their Western counterparts," it said.

These consumers passionately follow fashion online, particularly on blogs. Shanghai residents have a reputation of being smarter customers who compare prices more, according to Vogue's Cheung.

They also travel a lot and buy luxury items in Hong Kong, Milan, London or Paris.

Ying, for instance, dished out 5,500 euros ($7,500) in Paris for a watermelon-coloured Birkin bag -- made by Hermes and considered a symbol of wealth due to its high price and elusiveness.

"It's very difficult to get in China, and many of my friends would be willing to pay double to get a Birkin," she said.

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China luxury watch blogger forced to stop posting
Beijing (AFP) Sept 23, 2011 - A Chinese blogger praised for posting pictures of Chinese officials and their luxury watches online said Friday he had been forced out of action due to outside "pressure".

The Internet activist, known by his account name "Huaguoshanzonshuji" on Sina's Weibo -- a Chinese equivalent of Twitter -- has been posting pictures of government officials, stating the brand and the value of their wristwatch.

His commitment to exposing the officials was even praised by the state-run Xinhua news agency earlier this month which said the fight against corruption should follow his method.

But he told AFP his Sina accounts were shut down this week and accounts he registered afterwards with other Chinese microblog service providers had either been closed or had their names changed.

"I believe (the service providers) did not mean to do it. They may have come under some pressure," said the activist, who identified himself as Daniel Wu.

It is unclear who the pressure came from, but China, which has the world's largest online population with nearly 500 million users, regularly blocks content it deems politically sensitive as part of a vast censorship system.

Wu said he would stop surveying watches "for now", hinting that it may be for self-protection.

But he said he would resume the practice once the dust had settled.

"I am not a corruption fighter... but I think this (survey) is a personal choice that should be respected," he said.

"Also I believe transparent information is the best solution to problems."

The idea for the survey came to Wu after a deadly high-speed rail crash in July in eastern China which killed 40 people and prompted a storm of public outrage.

In a report on the accident, the activist noticed railways minister Sheng Guangzu wearing a 70,000 yuan ($11,000) Rolex and one of his deputies, Lu Dongfu, sporting a 50,000 yuan model.

Wu also posted a picture of Sun Jingmiao, president of the National Development and Reform Commission in the eastern province of Zhejiang, wearing a Rolex worth 70,000 yuan.

And Zhou Wenzhang, vice president of the China National School of Administration, was seen wearing a watch identified by Wu as a Piaget Emperador estimated to be worth 100,000 yuan.

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Nippon Steel, Sumitomo Metal Industries to merge
Tokyo (AFP) Sept 22, 2011
Japan's biggest steelmaker Nippon Steel and third-ranked rival Sumitomo Metal Industries on Thursday announced a merger that will create the world's second-largest steel firm. The tie-up, which they plan to launch officially on October 1, 2012, will create a steel giant second only to India's ArcelorMittal and generate savings in the face of increasingly intense global competition. Throu ... read more

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