REPOR T
Big boys’ toys The people in China buying yachts and private jets aren’t who you would expect
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n an unseasonably hot day in mid-April, a line of sternfaced Chinese businesspeople formed next to a private jet in a ropedoff section of Shanghai’s Hongqiao airport. While the humorless bunch weren’t gathered around the biggest plane on the lot – that distinction went to a Boeing 737 converted into a business jet – they were queuing to see the centerpiece of the exhibition, a new US$65-million Gulfstream jet, what its manufacturer calls the biggest and fastest in its fleet. A week earlier, a similar cast of characters gathered at Shanghai’s expo grounds to inspect what were the world’s top-of-the-line yachts. In a country where the rich have embraced Louis Vuitton, Audi and other luxury brands as status symbols, private jets and yachts on offer at these shows would seemingly be the ultimate topend purchase. But most buyers of these jets and yachts displayed at the respective shows didn’t hail from China’s superrich business class, nor were they disobedient mandarins ignoring President Xi Jinping’s mandate for official austerity. While China’s legion of millionaires and billionaires who can afford such big-ticket luxury items grows by the day, a September report from Hong Kong-based Cheuram Consulting Group shows that yacht ownership is low among China’s superrich and many show only a passing interest. Rather, it is corporations that have the
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biggest appetites for these vehicles of the mega-rich, which is also the case for private jets, analysts and those in the industry say. Granted, in the West it is not unheard of for a corporation to own a yacht or private jet. But these big boy’s toys are much adored by the superrich in developed countries because they offer the privacy, convenience and luxury that many desire but only those with an impressive stature of capital can afford. In China, however, they are seen more as a business tool.
A market from sea to sky Mainland demand for private jets and yachts has steadily increased over the last decade, those in the industry say. “When you look back at the greater China region we had about 20 airplanes in the region in 2007. Today we’re over 110 – that’s grown by a factor of five in such a very short period of time,” said Steve Cass, a spokesman for Gulfstream Aerospace. Growth in China for private jets isn’t limited to Gulfstream, as Beijing continually relaxes rules regarding private aircraft ownership and use of low altitude airspace. Currently there are approximately 336 private jets operating in China, with an estimated 40 on order this year (compared to 27 last year), Bloomberg News reported, citing an industry analyst. In the yacht sector, growth is equally as impressive. Italy, the largest foreign player in the yacht sector, export-
ed US$1.2 million in yachts to China in 2006; the country did US$62.8 million in exports in 2012. A report issued by the country’s Shanghai trade office states that sales grew 59.5% year-onyear in 2012.
Wanted: New, luxurious and not made in China Companies driving this growth often buy yachts and planes for similar reasons. As with private jets, the mostly corporate buyers view yachts as a business tool to impress clients. While Western yacht owners might use their vessels as floating hotels for a private getaway, complete with lavish bed-