CHINA (Hong Kong) - The global financial crisis, which did not spare China either, is now attracting Chinese investors' attention to good wines. They now see, how they can cost-effectively invest in the wine market and how to maintain a long-term winning guarantee. Investors are being encouraged by experts of the financial industry in Hong Kong, who consider and recommend investments in rare wines as an alternative for good capital growth. Their explanation is the Chinese' current insatiable demand for imported wines.
"We are able to invest in various shares with various risks simply because they are available. On the other hand, wines with a good to higher quality, rare vintage wines, wines from certain traditional wineries and those with certifications can not simply be refilled, which makes them irreplaceable. Their value depends on that and it keeps increasing", explains George Tong, wine investor and vice president of the Wong Hau Plastic Works & Trading Co., Ltd. "For instance, every time somebody opens a bottle of Chateau Lafite-Rothschild vintage 1982, I have to think about the increase in value and of course the profit".
The strongest impulses for investors come from the continuing and still rising demand for imported wines, in combination with the rapid growth in personal assets in China. What inspires the super-rich and the upper class in the first place, now also goes more and more for the growing Chinese middle class. Top wines become more and more of a status symbol and are turning into a very efficient tool in business relationships.
"You have to understand the Chinese culture. When the Chines invite you for dinner, they want to show their appreciation and this they do more and more with giving away or opening up a bottle of precious wine", says Carson Chan, Managing Director of the auction house Bonhams in Asia. "At the same time, the Chinese expect the same when they are invited. Then, too, they will choose a precious wine."
After many years of not-knowing, at least the rich but also the growing middle class of China has learned a few things. Now, they have enough or even good knowledge of the wines from the west. They particularly target quality wines and in the end focus on the worldwide known French wine-growing region Bordeaux.
China is already one of the 10 biggest wine consumer countries today and experts anticipate China to move to number 7 already in 2012. The Chinese wine market is globally sending up the price for wine. The price for a bottle of the 2005 Domaine de la Romanée Conti rose from about 2000 dollars in 2005 to 8200 dollars in 2009. Hong Kong's wine market has now turned into one of the largest beneficiaries in the international wine trade. Not least due to the 40-percent tax return by the Chinese government last year. (we reported)
The worldwide auction houses Sotheby's and Christie's say in unison that the South-Chinese city Hong Kong already supersedes the cities New York and London as the largest market for rare vintages. Two auctions in 2009 only, brought Sotheby's a profit of 14.3 million dollars, the double amount that the traditional auction house in London made. A spokeswoman of Sotheby's confirmed that an anonymous Chinese bidder bought a bottle of Chateau Petrus 1982 Imperial for exactly 93.077 dollars, which made it a record.
However, those who believe that all Chinese in general make a large profit by paying much for their wines, does not understand the Chinese philosophy. For some Chinese who own precious wines, there is now expanding dimensions of society. Guanxi* is the magic word. Investment banker Samuel Young is giving the parade example. Many of his customers ask him to sell them one or two bottles of his collection. "I end up doing so", says Young and explains: "however, I am not doing a pecuniary deal here. I use the sale of single wines to customers solely to improve my business relationships and rare wines are perfect for this cause. This is just my way of investing." (aw.yoopress)
*Guanxi stands for the network of personal relationships, which is not left out in any decision-making in China. Thus, the Chinese have clear borders between relatives, friends, business partners and strangers, in order to be able to assess the degree of mutual trust and help. Contracts and agreements are generally only considered a guideline, which can be departed from in case of doubt - the relationship network Guanxi prevails. (source: Wikipedia)