Saturday, April 27, 2013

Kim Jong Un – $5 billion, North Korean People - Zero.

Just don’t ask what’s in my other hand.

This Business Insider article that reports that Kim Jong Un has US$5 billion stashed away for himself in international bank accounts is too disgusting for further comment. Read it. Then call for action and better fortunes for the North Korean people.

An Education That Money (or a Gun) Can’t Buy

Don Corleone he is not.

The 37% mark on his masters dissertation should have been sufficient evidence that Li Yang isn’t the brightest light in his family. However, the 26 year old son of an affluent mainland Chinese official (unnamed) who is studying at the University of Bath wanted to drive the point home. “I am a businessman,” he proclaimed to his professor in a private meeting to discuss his score. He then placed GBP 5,000 on the his teacher’s desk. “You can keep the money if you give me a pass mark and I won’t bother you again.” The shocked professor dutifully shooed the guileless lad out of his office. As Li was packing to leave, an air gun loaded with six 22-caliber pellets fell from his coat pocket. Thankfully, the episode ended without further drama. There was no Godfather moment about “an offer he don’t refuse”. Instead, the police were called in. Earlier this week, Li was sentenced to a fine and a year behind bars.
It turns out that Li was not a completely bad apple. He reportedly was a student who had earnestly tried to study while working for his father’s company. The pellet gun was simply a hobby – he enjoyed target practice. And he plead guilty to the criminal charges and showed remorse in the courtroom. Nevertheless, his bluster and sense of entitlement can’t help but cause eyes to roll. More money than sense. At times, it seems that no amount of education can overcome that.     

Wednesday, April 24, 2013

The Asian Spoils

But I’m soooo worth it...

China’s one-child policy has long raised fears about an emerging generation of princelings and little princesses. A survey in Korea highlighted in January in this column showed that country’s youths valued money more highly than ethics. Now, this SCMP article on spoiled children in Hong Kong reports that Hong Kong’s children (average age of 11) have an elevated level of narcissism. Interestingly, a study conducted of 9,400 youngsters came up with a numeric score of perceived self-worth based on a 14-point scale. Hong Kong’s kids were rated 3.89. This doesn’t sound high, except when compared to the US, UK and Australia, which had ratings of 2.9, 2.36 and 2.81, respectively. The author of the study also said that 16% of the Hong Kong children showed signs of aggression and bullying and even higher scores commensurate with that of juvenile criminals in the US and Canada.
By and large, Asians are a hard-working bunch, and they put huge premiums on the achievement of their children in evaluating the status and wealth of the family. However, when such success is narrowly defined in terms of an academic score or the brand of a school, it comes at a cost. Human beings are complex social creatures, constantly at tug-of-war with conflicting instincts. Sending conflicting messages to our kids that they deserve privilege and yet must also work their butts off to achieve it surely cannot help.

Thursday, April 18, 2013

Mainlanders to Highlanders

A wee bit of tradition

Money spent by wealthy mainland Chinese has been like a virulent bug, resulting in a global pandemic of luxury fever. This year, official austerity measures in China have dampened some of the symptoms of this condition, as evidenced by a drop off in sales growth of European jewelry, fashion and wine. However, viruses tend to be tough little buggers that morph and adapt rather than simply disappear. Similarly, Chinese spending has been increasingly focused on Scotland. As reported in this Jing Daily article on Scotland's luxury offerings, single malt whisky, cashmere, and that evergreen symbol of rarified privilege – golf – have caught the fancy of Mainlanders. Now, mind you, tartan frocks and kilts may or may not match Chinese aesthetic sensibilities. However, few would argue that premium whisky is to baijiu what a pristine loch is to a pig-infested Shanghai river. And perhaps most importantly, unlike the continental European brands that smack of new money and seem to come and go with each season’s flu shot, Scotland conveys an image of stalwart traditions and steadfast history. In a world where everything seems to be in flux, such gravitas can be reassuring. So, Mr, Hu, low road or high road?

Wednesday, April 17, 2013

Paris Wearing Asian, Not Asians Wearing Paris

Paris Hilton goes Malay
Milan? No. Seoul.

For years, Asians have rabidly chased logo-emblazoned European luxury goods. Asia now represents 50% of luxury goods sales globally. 94% of Japanese women in their 20’s have a Louis Vuitton handbag. There are more Gucci and Hermes stories in Hong Kong than Paris. As a result of this consumption fever, the top end of the market has skyrocketed in price. US$10,000 paid for a handbag? Ten years ago, that idea dropped jaws. Now, it happens at the drop of a hat (brand not relevant).
However, there is a trend emerging that hopefully won’t be a flash in the pan: Asian luxury brands. Asian consumers are starting to look for something a little different, a little more individual, a little lighter on the wallet. They are finding it comfortably close to home. There’s Farah Khan from Malaysia (hey, if it’s good enough for a limelight-hogging hotel heiress...). Couronne handbags from Seoul, which look they could have tumbled off a runway in MIlan. And Exception de Mixmind, which was launched into fashion stardom in China by the country’s dishy-looking first lady. Materials are first rate – leather is purchased from the same Italian or French houses who supply the major brands. Workmanship is top-notch – why not, most of the goods are made in Asia anyway. And design ideas are fresh and reflective of home grown cultures.
With global demand for luxury products slowing, the major European fashion houses have reason to be concerned about maintaining attractive growth rates. Asia has long been their Shangri-la, even though the region has also posed threats to their brands from counterfeiting. A new threat may be emerging. However, if that trend gives more choice back to the consumer, it’s one that might be just lovely, dahling.

Monday, April 15, 2013

US$242 million Home in Singapore – Any Bidders?

Buy me, tear me down.

On May 16, Singapore may record one of the most expensive single family dwelling sales in history. 33 Nassin Road - an 85,000 square foot plot with a swimming pool and tennis court located near Orchard Road and close by the Botanic Gardens, the residence of the British high commissioner, and the Japanese and Russian embassies - is on the block for S$300 million. The house is owned by the chairman of Wing Tai Holdings, a leading real estate and fashion retailer. The most expensive residential home sale ever recorded globally is a villa in France that sold for close to US$500 million in 2008. Reports are hard-pressed to find another transaction which would top this one in Singapore. Sure, there are other properties that are more highly valued, including India’s 27-story Mumbai palace-in-the-sky owned by Mukesh Ambani ($500 million, as blogged last year on this site). However, such landmarks are rarely if ever sold.

Before anyone considers this a done deal, there are a number of obstacles that need to be overcome. First and foremost is the price tag itself. The owner is asking S$3,500 per square foot for the lot, which is over 50% higher than the next highest comparable sale in the Nassin Road area. The plot can be subdivided and sold as five residences; however, each would need to be sold at close to US$50 million just to break even on the purchase price itself. Furthermore, foreigners are restricted from buying landed property in Singapore. Therefore, the buyer(s) will likely need to be locals. Even in cashed-up Singapore, finding five tycoons willing to shell out that much money for another residence is a stretch. Lastly, the economic climate is not in the seller’s favor. The government has been trying to cool down a red-hot property market through higher stamp duties and other measures. Economic growth has been slowing more than expected, reflecting softer global prices for natural resources and heightened austerity from China.

It will be an impressive bragging right for Singapore if the property can be sold for close to its asking price. It will be even more impressive if the house isn’t sold just to be torn down and re-developed as five smaller properties, thereby reducing the place to simply a number on a page. And a memory.

Friday, April 12, 2013

Mei Mei, How the Nouveau do Play!

Guo Mei Mei - too rich for my blood.

If you were to read only one news story about the scandalous lives of China’s second-generation nouveau riche (called “fuerdai”),  this article in the is probably it. Absence only a dead body (don’t hold your breath), this report of the recent exploits of twenty-year old Guo Mei Mei has all the elements of a Tom Wolfian satire. To summarize:
  • In 2011, Mei Mei, who claimed that she was a general manager of an affiliate of the China Red Cross, posted pictures on Weibo (China’s Twitter) of herself flaunting her riches – a villa, a Maserati, designer handbags, etc. The Red Cross was forced to deny any affiliation with the girl. Rumors swirled that she was the mistress of a senior official of the charity. He was forced to resign.
  • Disgusted by the scandal, members of the Chinese public boycotted donating blood to the Red Cross. The Red Cross subsequently reported a shortage of blood.
  • This past weekend, newspapers reported that a yacht show held in Hainan island involved enough trading of sex and drugs to make Hugh Hefner blush.
  • Mei Mei was accused by a sports car website member of selling herself for sex at the event.
  • Mei Mei denied this in the only way she seems to know how – by flaunting her wealth to prove that she doesn’t need the cash. This time, she posted pictures of herself holding gambling chips worth US$800,000.
  • Not to be outdone by Mei Mei’s boasting, another seemingly unrelated fellow (rumored to be 19 years old) posted a screenshot of his bank account showing a balance of US$600 million. Take that, Mei Mei!
  • Weibo has since been lit up with disgusted netizens posting comments deriding the pair, and anyone else like them, for possessing less class than ordinary people have in their shit.
Whether Mei Mei is authentic or simply a publicity hound is still a legitimate point of debate. However, there is no question that Chinese are increasingly fed up with the showiness of the fuerdai.
The details of the story are in the link above. Enjoy reading it. Then shower off the slime.

Thursday, April 11, 2013

Gigi - Doing Things Her Way

She's man enough for me. thanks.

Gigi Chao, the daughter of Hong Kong billionaire Cecil Chao, has become a darling of both Hong Kong society and the global LGBT (lesbian, gay, bisexual and transgender) community. And for all the right reasons. Since last September, when Gigi’s father publicly offered US$64 million (an amount likely to bulge any man’s pants, one way or another) to any guy able to set her “straight” and win her hand in marriage, she has done what any strong, red-blooded offspring of an overbearing parent is bound to do – run the other way. She has resisted thousands upon thousands of propositions from men advertising everything from amazing abs to a willingness to undergo a sex-change operation as soon as the money hits his bank account, and remained faithful to her partner Sean Eav. She has also picked up the LGBT banner and waved it high and widely around Hong Kong as the community’s most visible activist. Given her media appeal and the strength of her conviction, Cecil Chao is clearly up against a formidable opponent. At least he can take solace in the likelihood that he will be able to retain the money, no doubt to continue to fund the morally rigid lifestyle for which he has become justly famous. Right.

Friday, April 5, 2013

A Leak or a Tsunami?

Scandal epicenter?

A news story that has been flooding the global media in the last day is the report that the British Virgin Islands(BVI)  – the world’s most popular tax haven - has sprung a massive leak.  Millions of emails providing details of thousands of wealthy individuals who may have stashed trillions of dollars away in anonymous bank accounts has been surreptitiously provided to a US-based organization of journalists – the International Consortium of Investigative Journalists. The ICIJ will be digging into this treasure trove of data and revealing its findings in the coming weeks.

The results could be globally seismic, both politically and economically. Certainly, there will be a drop-off in the use of the BVI as an offshore banking center. Secondly, the revelation of the extent of hidden fortune will be hugely embarrassing to wealthy and powerful people across the world, including the current French President. Thirdly, the Greater China region will experience more than its shares of scandal and intrigue. According to reports, the “majority” of names on the leaked list are from China, Hong Kong and Taiwan and relate to investments into China. The repercussions for China’s leadership could be meaningful, particularly given Xi Jinping’s focus on exposing corruption and reigning in the privileges of the elite. It is precisely this type of international media focus that has been known to spur the China Communist Party into dramatic action in the past. Stay tuned for the deluge.