Wainwright Marks Management - China's Luxury Shoppers Escape Impact of Trade Tariffs
November 16, 2018 (PRLEAP.COM) Lifestyle NewsAnalysts at Wainwright Marks Management say the impact of the trade war on China's luxury shoppers will be limited for now, as luxury items are not on the list of goods subject to the first two phases of trade tariffs.
Wainwright Marks Management analysts believe the impact will mostly be felt indirectly as the trade tariffs affect China's economy as a whole and the spending power of consumers as a result.
The US has imposed tariffs on imported Chinese products to the value of approximately $250 billion and China has reacted by imposing tariffs on $110 billion worth of goods from the US.
In addition, US President Donald Trump's has announced that he is preparing to hit the remaining products from China that are not yet subject to tariffs. These Chinese goods would amount to around $505 million.
Luxury shopping is an important market in Asia's largest economy and Wainwright Marks Management analysts expect China to have the most affluent households by 2021. China's luxury shoppers contribute more than $72 billion in yearly spending to China's economy and make up almost a third of the world's luxury market.
Wainwright Marks Management analysts say Chinese shoppers are responsible for between 25 and 35 percent of the world's luxury purchases and the majority of those sales happen outside of China. As the price gap of luxury goods between China and the rest of the world narrows, however, Chinese sales are being redirected back to mainland China with much of the retail growth occurring online.
However, Wainwright Marks Management analysts have voiced concerns about the impact the ongoing trade dispute will have on China's economic growth. The International Monetary Fund recently warned that escalating trade tensions could reduce China's economic growth potential by 1.6 percentage points.