China's Super-Rich Buying Yachts
by Claudia Blume, China Confidential on 12 Jan 2008
For boat manufacturers, the yachting market of the future is China, where luxury sailing yachts and motorboats are becoming the ultimate accessory of the super-rich. New marinas are being developed, and the government is promoting sailing ahead of next year's Olympics. Claudia Blume reports from Hong Kong.
China Yachting - spreading the word to China’s new rich class .. .
China's market for pleasure boats is still in the infancy stage. Just 400 private boats are registered nationwide, and almost all of them are motorboats.
But Adrien Magnan of Marine Dragon Consulting in Shanghai, which specializes in the Chinese yachting industry, says the amount spent on luxury boats has been leaping upwards by tens-of-millions of dollars in the past few years.
'If you look at the increase, it's about 100 percent every year,' he explains. So 2005 was about $30 million. 2006 was about $50 million. Now we are exceeding $100 million in imports of yachts. And so, if next year it will be $200 or $400 million, in a few years it will catch up with countries like Italy or France in Europe. I wouldn't be surprised to see China in the top five markets in less than five years.'
There are about half-a-million US-dollar millionaires in China today. Sales of luxury items there are skyrocketing, and yachts are becoming the ultimate accessory of the ultra-rich.
Mike Simpson, owner of Hong Kong-based yacht dealer Simpson Marine, started selling boats in China three years ago. He says his wealthy Chinese customers are seeking a Western lifestyle.
'As soon as they have money, they are all reading these lifestyle magazines. It's almost like step-by-step,' he says. 'It's the fast cars, it's the Bentley or whatever it is, and then the very smart house, which will probably be French Renaissance--and they get European architects to design it for them--then, of course, the European fashion and, now, it comes to the yacht. The yacht is part of that whole thing.'
Shanghai's International Boat Show has already become one of Asia's largest. Smaller marine fairs are held in Qingdao and Dalian in Northeastern China and in Shenzhen and Zhuhai in the South.
Pleasure sailing, virtually unheard of in China until a few years ago, is becoming increasing popular. Last month, around 60 teams sailed across the border from Hong Kong to Shenzhen in the China Cup Regatta, the country's first major boat race. This summer, a Chinese team joined the America's Cup, the world's most famous sailing competition, for the first time.
Adrien Magnan says that despite China's long coastline and many lakes, there are fewer than 10 marinas on the whole mainland, with a total of about 1,000 moorings. But he says more are being developed, for example in Xiamen on the East Coast or on Hainan Island in the Southeast, as local governments realize the positive economic impact of marinas.
'Definitely. I mean, they are trying to open the coastline to the rest of the world,' he said. It creates business, it creates real local economy. A marina is more than a place where you park yachts. It's a real profit-maker for the whole city in terms of brand image, in terms of attractiveness of a city, and it generates, of course, revenues and employment for the city.'
Both Magnan and Simpson say a lack of infrastructure, expertise and repair facilities are some of the challenges for the development of China's yachting industry. But they say the biggest obstacle is a lack of uniform regulations.
The status of pleasure motor yachts has not yet been clarified, and there is no national system for licensing sailors. If a skipper wants to sail a yacht from one province to another, for example from Shanghai up the coast to Qingdao, he has to get cruising permits from the authorities in each location.
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