China's Millionaires Are Cutting Back

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Jan. 16 2014 1:26 PM

China's Millionaires Are Cutting Back

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A Chinese woman loiters outside a Louis Vuitton shop in Hong Kong on April 23, 2013.

Photo by Anthony Wallace/AFP/Getty Images

I wrote recently about the impact Xi Jinping’s austerity drive is having on food inflation, but judging by this year’s Chinese Luxury Consumer Survey from the Hurun Report, the impact of the Chinese elite’s new frugality goes beyond food. 

Overall spending by high-net-worth individuals, defined as those with at least 10 million RMB ($1.6 million) in China, was down 15 percent last year, and spending on gift-giving was down a dramatic 25 percent. Interestingly, this comes at the same time that the number of respondents who are “extremely confident” about the country’s economy rose for the first time in five years.

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This trend seems like it could have an impact not just in China, but for retailers in the United States as well. High-end American stores are increasingly catering to Chinese visitors, whose total number is expected to double by 2014. Chinese visitors spend about $6,000 each on every visit here, versus the $4,000 that visitors from other countries spend on average, the New York Times reported in 2012.

According to the survey, Australia knocked France out of the top spot for vacation destinations. Hermès has displaced Louis Vuitton as the most popular brand for gift-giving by men, with Apple in the No. 2 spot.

Joshua Keating is a staff writer at Slate focusing on international affairs and writes the World blog. 

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