Archive for ‘Affluence’

26/03/2015

India Takes Top Spot In Producing Wealthy Households – India Real Time – WSJ

India’s affluent-household club is growing quickly.

Over the next five years, the number of such households–meaning those with financial assets of $100,000 to $2 million –is expected to jump 10-fold, to 4.9 million, according to an Economist Intelligence Unit study. In percentage terms, India ranked first among the 32 nations covered in the report.

By that same year,  the total financial assets in these households should reach $879 billion, driven by significant “economic reforms, attention to infrastructure, a stable political outlook and positive investor sentiment,” according to the report.

via Report: India Takes Top Spot In Producing Wealthy Households – India Real Time – WSJ.

28/01/2015

BBC News – The village that just got its first fridge

Three-quarters of the world’s homes have a fridge – an appliance that can revolutionise a family’s life. A tailor in one Indian village has just become the first person in his community to own one – something he has dreamed of for 10 years.

Santosh choosing a fridge

Santosh Chowdhury is pacing up and down speaking into his mobile phone.

“How much longer? It’s left past the auto-rickshaw stand, yes that’s right,” he shouts, and then continues his nervous pacing.

It’s a big day for him and indeed for the village of Rameshwarpur, just outside Calcutta in north-east India.

Santosh has bought a new fridge – not just his first but also the first in the entire community of 200 people. “Owning a fridge is quite rare in a village like ours,” he says.

The lack of fridges in Rameshwarpur reflects the situation across the whole of India. Only one in four of the country’s homes has one. That compares to an average of 99% of households in developed countries.

But change can be rapid when linked to an emerging middle class. In 2004, 24% of households in China owned a fridge. Ten years later this had shot up to 88%.

“Ours is the first generation to own a fridge in my family,” says Santosh. “No one in my father’s and grandfather’s time had ever seen one.”

Rameshwarpur has a distinctly rural feel. People bathe in a pond in the middle of the village, children fly kites in the dusty lanes. The homes are little more than simple huts, made of mud and brick. But the village has electricity and many houses have televisions.

Santosh works as a tailor. He lives in a modest, two-room hut which doubles as his home and workplace. “I don’t have a regular job as such,” he says. “Sometimes I also work part-time in a factory. I make about three to four dollars a day.”

Life is quite hard, especially for his wife Sushoma.

She cooks lunch, stirring a pot of rice on a wood fire outside their hut. It’s something she does every day because they have no way of storing leftovers. So Santosh has to go the market early each morning to shop for groceries.

He’s always wanted to make life easier for his wife and has been dreaming of buying a fridge for 10 years. “Owning one will be so convenient,” he says. “You don’t have to buy vegetables every day, you can store food – especially in the summer.”

So he’s been saving hard, putting away a bit of money every month for a purchase that costs more than a month’s salary. “I don’t make that much money, that’s why it’s taken me so long. But now I have enough,” he says, smiling.

At one of Calcutta’s high street stores, about 15km from his home, Santosh had several models to choose from. Peering inside, he ran his fingers along the side of a bright red model.

“It was quite confusing. It was my first time you know. I couldn’t figure out which one to get,” he says shyly. “My wife wanted a red one. I wanted one that will consume the least power. We need to keep our bills down.”

Finally, the deal was struck. Santosh got a discount because it was the final week of the winter sales. The price was 11,000 rupees (£120) – but more importantly, he was able to pay in instalments, having paid just under half the money up front.

“No one pays cash any more like they used to,” says store manager Pintoo Mazumdar. “Everyone can get a loan from the bank or the store – all you need is a bank statement and ID. That’s why so many lower income people can afford to buy a fridge these days.”

 

FRIDGEONOMICS

Fridge ownership around the world

76% Global average

65% Asia Pacific

99% Europe and North America

87% Latin America

63% Middle East and Africa

Source: Euromonitor

 

Santosh’s fridge finally arrives on the back of a cycle rickshaw. He walks along next to it with a broad smile. Many of the villagers come out on to the lane as well, craning their necks to get a better look.

“Careful, careful,” he cries out as a couple of them help carry the fridge into his house.

Then it’s time for a religious ceremony.

His wife applies a dab of vermillion to the fridge, to keep away evil spirits, and then blows on a conch shell to seek divine blessings and welcome the fridge into their home. The fridge has pride of place – next to Santosh’s sewing machine and their tiny television set.

They simply cannot stop smiling.

“We’ve dreamt of this moment for so long,” says his wife Sushoma. “Some of our neighbours have already asked us if they, too, can store some food in our fridge. “And I can’t wait to drink cold water in the summer.”

As Santosh shows off his fridge everyone crowds around, excited. “Imagine, they won’t have to shop for fresh vegetables every day,” says one woman. “I’m thinking of getting one too,” another man says.

It’s a special moment for the Chowdhurys. This acquisition could potentially transform their lives. “I can focus on finding more work and not worry about buying food for the family,” Santosh says. “My wife will get more free time and perhaps she can give me a hand as well.”

With those words, he opens his fridge and places the first contents inside – tomatoes, an aubergine, eggs and some milk.

via BBC News – The village that just got its first fridge.

15/12/2014

This Is What India’s Radio Cabs Are Doing to Make Women Safer – India Real Time – WSJ

Indian authorities and radio taxi operators in the national capital have stepped up security measures to ensure passenger safety in the aftermath of an alleged rape of a female passenger by a driver contracted to the international car booking service Uber Technologies.

Transport authorities in New Delhi have ordered radio fleet taxi companies and web-based operators to submit database of their drivers whose credentials need to be checked and have asked them to come up with a revised safety plan to be put in place by early next year, a Delhi police official, who did not wish to be named said Monday.

“A list of around 20,000 drivers has been submitted so far out of which the background details of more than 10,000 still need to be verified,” he said.

Last week, Delhi’s transport department barred Uber from operating its ride-hailing system in the national capital until it got the proper licenses. Uber on Thursday said it would suspend its service in the capital while it reviewed its screening processes. The department had stated that only six registered radio taxi companies would now be allowed to continue operating in New Delhi.

The cab operators in New Delhi, for their part, said they have certain safety rules in mind that they would submit by Dec. 31 to the transport department.

via This Is What India’s Radio Cabs Are Doing to Make Women Safer – India Real Time – WSJ.

10/12/2014

Need Financing to Build U.S. Property? Try Chinese Visa Seekers – China Real Time Report – WSJ

The giant trucks pumping concrete in Hudson Yards, New York’s biggest real-estate project in a generation, are being financed by an unlikely source: about 1,200 Chinese families in search of U.S. visas. As the WSJ’s Eliot Brown reports:

Developer Related Cos. says it has raised roughly $600 million from the families to build the foundation for three skyscrapers at the West Side project, a 17-million-square-foot colossus of office, retail and residential space set to open over the next decade.

To finance the concrete-steel platform, Related tapped a little-known and at times controversial federal visa program known as EB-5, which offers green cards to foreign families who invest at least $500,000 in U.S. projects that create at least 10 jobs per investor.

The amount brought in so far, which privately held Related hasn’t previously disclosed, is a record for the cash-for-visa program.

Related’s success shows how the once-obscure federal program has grown in popularity among developers and foreign investors since the recession.

Chinese nationals are the biggest source of EB-5 funds, making up more than 85% of visas approved in the 12 months ended in September. Many are investing for their children rather than for themselves, said Kenneth Li, a Houston real-estate broker who has offered advice to Chinese investing in EB-5 projects.

“For many of them, it’s for the next generation,” he said.

via Need Financing to Build U.S. Property? Try Chinese Visa Seekers – China Real Time Report – WSJ.

07/12/2014

They’re Coming! Chinese Tourists Will Make 100 Million Trips Abroad This Year – Businessweek

In the first 11 months of this year, mainland Chinese tourists made more than 100 million international trips—already topping the travel total for 2013, according to new data from the China National Tourism Administration.

People hail the arrival of Asia's largest luxury cruise liner, Voyager of the Seas, in Tianjin, China, in 2012

Fifteen years ago, Chinese tourists made less than 10 million trips abroad. Since then, however, rising incomes have led to rapid growth in domestic and international travel.

Many of those trips—more than 60 percent—are within Greater China, including Hong Kong, Macao, and Taiwan. Almost 90 percent of destinations are within Asia.

China UnionPay—the country’s Visa (V) card—now offers several promotions hoping to encourage overseas tourists to spend more. Cardholders visiting Paris, Rome, and Sydney can get 15 percent off hotels, restaurants, and major tourist attractions. Those touring in Bali, Phuket, and the Maldives can get 10 percent off.

Meanwhile, national tourism authorities for Switzerland and Iceland recently put up booths at Beijing’s “Ski & Style” industry event in late November, hoping to lure more affluent Chinese skiers to European slopes.

via They’re Coming! Chinese Tourists Will Make 100 Million Trips Abroad This Year – Businessweek.

28/11/2014

China Soon to Have Almost as Many Drivers as U.S. Has People – China Real Time Report – WSJ

China will soon have nearly as many drivers as the U.S. has people.

As of this week, the number of Chinese motor-vehicle drivers was poised to break past 300 million people, according to the country’s top law-enforcement agency, including 244 million licensed passenger-car drivers. The U.S., by comparison, has about 319 million men, women and children, and nearly 212 million licensed drivers.

Meanwhile, China has 154 million private autos, next only to the U.S., said the ministry. The U.S. government puts the number of cars and trucks there at around 240 million, suggesting China still has a ways to go before it can fill parking lots the way Americans do.

The numbers – a result of China’s wealth accumulation over the past decade as well as the rise a domestic car-manufacturing base – have all kinds of implications for the world’s No. 2 economy. The rise in the ranks of drivers could be good news for an industry facing slowing growth and overcapacity, though it also complicated Beijing’s efforts to wrap its arms around the country’s massive pollution problems.

First, the details: Chinese drivers are increasingly female, both older and younger, and new to the streets.

via China Soon to Have Almost as Many Drivers as U.S. Has People – China Real Time Report – WSJ.

03/11/2014

Wanted: 500,000 pilots for China aviation gold rush | Reuters

China’s national civil aviation authority says the country will need to train about half a million civilian pilots by 2035, up from just a few thousand now, as wannabe flyers chase dreams of landing lucrative jobs at new air service operators.

Guests walk next to aircraft during the Asian Business Aviation Conference and Exhibition (ABACE) at Hongqiao International Airport in Shanghai in this April 15, 2014 file photograph. REUTERS/Carlos Barria/Files

The aviation boom comes as China allows private planes to fly below 1,000 meters from next year without military approval, seeking to boost its transport infrastructure. Commercial airlines aren’t affected, but more than 200 new firms have applied for general aviation operating licenses, while China’s high-rollers are also eager for permits to fly their own planes.

The civil aviation authority’s own training unit can only handle up to 100 students a year. With the rest of China’s 12 or so existing pilot schools bursting at the seams, foreign players are joining local firms in laying the groundwork for new courses that can run to hundreds of thousands of dollars per trainee.

“The first batch of students we enrolled in 2010 were mostly business owners interested in getting a private license,” said Sun Fengwei, deputy chief of the Civil Aviation Administration of China‘s (CAAC) pilot school. “But now more and more young people also want to learn flying so that they can get a job at general aviation companies.”

While uncertainties remain for what will be a brand new industry, firms are betting they can make money and trainee pilots are convinced they can land dream jobs. Among them is Zong Rui, a 28-year-old former soldier in the People’s Liberation Army from Shandong province in east China, attending a pilot school in Tianjin, an hour’s drive from Beijing.

“The salary is good for a general aviation pilot,” Zong told Reuters by telephone, preparing for a training session. Even without a job lined up, Zong is certain money he borrowed to learn how to fly will pay off: “I can easily pay back the 500,000 yuan ($81,750) tuition in two years, once I get a job.”

via Wanted: 500,000 pilots for China aviation gold rush | Reuters.

19/10/2014

Chinese Home-Buying Binge Transforms California Suburb Arcadia – Businessweek

“Oh, hey! How ya’ doin’?” Raleigh Ornelas hollers, leaning out the window of his spotless white pickup truck. He’s recognized the man across the street, a developer standing in front of a Tuscan-style mansion under construction. “Where have you been hiding at? I call you, you don’t call me.”

Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb?

Ornelas is an informal broker in Arcadia, Calif., a Los Angeles suburb at the foot of the San Gabriel mountains. He’s been keeping an eye out for the builder, an Asian man with a slight comb-over who goes by Mark. Ornelas has found two older homeowners who’ve finally agreed to sell their properties, and he knows that Mark, like all developers here, needs land on which to build mansions for an influx of rich clients from mainland China.

Ornelas rattles off addresses on a nearby street. “Three-eleven, that guy, he’s wack,” he says, shaking his head. “He wants 2.8.” He means million dollars. “And then 354, they want $2 million.”

The lot is 17,000 square feet. “Seventeen for 2 mil?” Mark asks, incredulous.

“I know,” Ornelas says. “They’re going crazy.”

A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

via Chinese Home-Buying Binge Transforms California Suburb Arcadia – Businessweek.

19/10/2014

China’s Jet Set Spends Overseas While Luxury Sales Rise in U.S. – Businessweek

For the first time since Boston consultancy Bain & Co. began tracking the global luxury market, overall sales of luxury goods declined in mainland China over the first eight months of 2014. The dip was small—sales dropped 1 percent—but significant because of the outsize hopes brands from Prada (1913:HK) to Rolls-Royce (RL/:LN) have placed on wooing China’s socially ambitious spenders.

The fully-booked Nanatsuboshi (Seven Stars) luxury sleeper cruise train in Kagoshima, Japan

In the past year, the number of billionaires in China jumped by more than a fifth (from 157 to 190), according to Switzerland’s UBS (UBSN:VX) and Singapore research firm Wealth-X. But spending on luxury goods within mainland China has been squeezed by two significant trends: the continuing austerity and anticorruption drive led by President Xi Jinping and the growing preference for China’s jet set to snatch up expensive handbags and watches while on overseas trips (in part to avoid pricey import taxes at home).

Bain forecasts that overall global luxury sales will rise 5 percent in 2014, with the largest increases expected in the U.S. and Japan (at 5 percent and 10 percent, respectively). Some portion of that spending comes from Chinese tourists in New York, Los Angeles, and Tokyo, but the report doesn’t attempt to estimate how much. Bloomberg Businessweek has previously reported on the growing market for luxury train service in Japan, where household wealth is rising more quickly than at any time in the past five years and seniors want to enjoy their golden years.

via China’s Jet Set Spends Overseas While Luxury Sales Rise in U.S. – Businessweek.

30/09/2014

China’s Legions of Tourists Will Spend $155 Billion Abroad This Year – Businessweek

China is preparing for roadways clogged with cars and trains overloaded with travelers during its weeklong National Day holiday starting Oct. 1. But the real action for Chinese tourists will be happening overseas.

Chinese tourists in Paris

Over the full year, 116 million Chinese tourists are expected to travel abroad and spend $155 billion, up 20 percent over 2013, projects a new report by the China Tourism Academy. That compares with less than $55 billion that will be spent by tourists inside the country, a gap of more than $100 billion. “The deficit will further increase in the future,” predicts academy head Dai Bin, who was quoted in the China Daily.

China now sends more tourists abroad than any country in the world, according to China’s National Tourism Administration. Favored destinations include Australia, South Korea, and Southeast Asian countries as well as, increasingly, Europe and the U.S. Chinese tourists abroad will exceed half a billion annually within five years, says Shao Qiwei, administration chief of the English language paper.

In the first half of this year, Chinese spent $70 billion on overseas travel, up 20.7 percent from the same period a year earlier. Chinese travelers abroad spend almost three times as much per capita as foreign tourists in China, says Fan Zhiyong, an economist at Renmin University in Beijing, the official Xinhua News Agency reported.

Along with hotel lodging fees and restaurant meals, overseas spending includes plenty of purchases of such high-priced products as Rolex watches, Prada (1913:HK) shoes, and Chanel handbags. One-third of all Chinese travel expenditures goes to buy goods, often “luxury items—to take back home,” says McKinsey & Co. in a June report. Total spending could reach $194 billion by 2015, Morgan Stanley (MS) estimated last year.

via China’s Legions of Tourists Will Spend $155 Billion Abroad This Year – Businessweek.

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