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Ni Jin Festival: Inflation Control Under The Impact Of Luxury Tide

2011/6/21 10:57:00 56

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Ni Jin Festival Luxury Inflation Regulation

The world's major luxury goods companies are accelerating to China.

In recent years, LV, Gucci, Chanel, Armani and

Hermes

And other international luxury brands have begun to spread across China's two or three tier cities.

Not long ago, LV opened in the first store in Nanjing, and many female customers rushed to buy in front of the counter.

Last year, China's luxury consumption reached US $6 billion 500 million, and its growth rate and sales volume remained the first in three consecutive years.

In the next three years, China is expected to surpass the United States and Japan and become the world's largest consumer of luxury goods.

In June 15th, Yao Jian, spokesman of the Ministry of Commerce, confirmed for the first time that China will lower the import tariff of luxury goods, and the rumor of more than one year's tariff reduction has finally been officially confirmed.

This has laid the foundation for the huge domestic consumption of luxury goods in domestic demand.

Overseas sweep

The tide is expected to fade away.

According to the Ministry of Commerce survey, watches, bags,

clothing

The 20 brands of high-end consumer goods, such as liquor and electronic products, are quite large at home and abroad. The domestic market is about 45% higher than the Hongkong area, 51% higher than the United States, and 72% higher than France's five products.

Such a wide gap between the price gap and how much of the consumption that should belong to "domestic demand" is lost overseas, and the loss to China's economic growth is enormous.

Even if the domestic market substantially reduces import tariffs, most of the profits of these brands will be taken away by foreign companies, but at least the paction costs will be greatly reduced and more people will be able to solve the employment problem.

Of course, luxury goods can be reduced to street products in China when luxury stores are located in China.

Generally speaking, only when the number of rich people is formed, will the demand for luxury goods soar rapidly.

Over the past ten years, China's nominal GDP has increased by nearly 5 times, reaching 39 trillion yuan in 2010. These wealth mainly comes from the explosive growth of the real estate market, the massive exploitation of resources and energy resources such as minerals and petroleum, and the wealth that has successfully escaped from the stock market in the past few years.

About 30% of these huge wealth have been taken away by the government by means of Taxation, and the rest of the wealth growth has been pformed into private wealth.

Because most of these wealth are obtained through price arbitrage and institutional dividends, money is relatively easy to come by.

We often see at the auto show that some people can buy tens of millions of dollars of luxury cars at any time. In their eyes, it's like buying cabbage.

The interesting phenomenon is that the owner of this huge fortune may be the big boss of the eastern enterprises, whose wealth is created by the lowest working group.

However, the total price of such a luxury car may be the total wage income of a worker over 100 years.

The abundant investment and consumption ability of the affluent community is indeed the time to find the floodgates. Otherwise, the currency will surely lift all the prices of consumer goods, and the stability of house prices will never happen.

By lowering import tariffs, diverting more funds to the prosperous luxury market, freezing the flood of liquidity with lower policy costs with a large deal of high priced goods.

Undoubtedly, if the luxury market can flourish at home, it will be a very effective move to absorb the basic currency that has been developing over the years.

For asset bubbles, which are already very serious and the inflation situation is deteriorating, it is a good choice to control the inflation of China through the absorption of monetary liquidity in the luxury market.

This is Chen Yun's experience of managing inflation in the 60s of last century.

At that time, there were several high price commodities to stabilize prices.

However, in order to control inflation, the use of tariff reduction to boost the domestic luxury market to absorb huge excess of money does not become a universal pretext for tax cuts for the rich.

Because the rich class of China has a large amount of gray income, it has not been able to enter official income statistics (Wang Xiaolu, a National Bureau of statistics and economist, has fought the battle for this. The argument is whether the gray income of government officials in 2009 is as high as 5 trillion and 400 billion).

Therefore, the logic of "tax reduction" for the prosperity of the luxury market and the need for the overall tax increase for the rich must be strictly distinguished.

Therefore, in the era of high inflation, on the one hand, if we want to divert the wealth of the rich class, these funds will not go around to speculation all kinds of commodities, and become the culprit of further inflation. On the other hand, we must systematically start the tax reduction plan for the middle and lower income groups.

Especially the use of tax cuts to further improve the middle class's spending power.

Only when the middle class is formed, can China's domestic demand have a stable foundation. After all, the number and consumption structure of the rich class can not become the main force of general consumer goods.