Tuhao, let's be friends

The language is evolving. This is true about Chinese language and true as well abut English language.

So, do you now what a Tuhao is ?

It is a word that has become very popuar recently in Chinese language. You can write like this : 土豪. And actually, it is not a new world, it is a quite ancient one. Used at firts to describe some low level nobility, it became at the beginning of the century a world to descrite a king of lang tyrant and then almost disapeared in order to come back now with a new usage.

The word is still pejorative, it describes someone that has mede a quick fortune in the contemporary China. And there is quite a few with the economic boom of the lats decades. They have very bling taste, buy expensive products without thinking aboud good taste or anything ike that. It is about showing off.

If you look at the two character, it refers to the land, dust, earth. The second one is a knight.

So, if you ade a fortune recently and love to display your money, you are a Tuhao. On Weibo and Weixin, the Chine equivalents of twitter, there have been tons of jokes about Tuhaos. A lot of them have revolved around the new iphone with a golden color which seems to have become a symbol of Tuhaoism... There has been at least a million Tuhaomessages in the three last month, thats quite a few. The trend is so strong that an english dicionnary, the Oxford English dictionnary, is thinking about including it in its next edition, saying that it is reminiscent of another word that apeared recently in English : bling.. So will there be a new wrd in English in 2014 derivateing from Chinese. This is under study but seems likely.

The basic sentence about Tuhao on the Chinese web is : Tuhao, let's be friends. It is the meaning of the word that has two connotations : money is important, so it's good to have Tuhao friends. Sarcasm and atrraction at the same time. People desipese them but people are jealous of them. There is many new words appearing in the English language and the pace of creation of new words is always going faster, and the word in Chinese has an irony attached to it which is lost in traslation. A Tuhao is something else than a nouveau riche.

Chinese people are very creative on the interne. Tarditional Changyu, these classical sentences used as mottos to describe all kinds of situations are very ppular in China and gain new lives when they are used in new contexts. Chinese people loves to create new words and Tuhao is a good example.

Another thing, this word is the proof of a deep change in Chinese society, when ou criticize tose bling people who have no taste, it means that the luxury image in China becomes more mature.

Sources :

Beijing Relocation

Shanghai Daily

China Daily

Marketing Buzzz

Importants annoucements from the Chinese government : liberalization of the economy to come soon

This might be a really important date in the history of China, following the experiment in Shanghai with a free-trade zone. There is no precise date annouced, but this is coming soon to a town near to you. This is a strong signal sent to the world economy and foreign investors.


What are the announcement that have been made and why are they so important ?

1. Freedom of circulation
   

In China, the Hukou sstem has exsted for decades. This is an interior passport that restricts the freedom of circulation for Chinese citizens. Now, this time seems to be over, or soon will be ovre. This means freedom of circulation in the most popualated country in the word, really a revolution, nothing less. It means that the government wants to develop further the Chinese large cities. The measures will first benefit the small villages, and later on middle sized cities. Expect more migrant workers in the streets of Beijing and Shanghai in the years t come.

2. Public companies with private capital
   

Another big change : the large Chinese public companies that have such an importante within the economy are going to be able to accept private investors. The opening of their capital to private funds might change everything in the Chinese economy. There will be a live test in the new Shanghai free trade zone.

3. Distinction between public control and management within public companies
   

The structure at the top in Chinese public companies can be overcompicated and favor opacity. New measures are going to better distinbguish the management from the state regulators or controllers.

4. A convertible yuan
   

The yuan will become convertible. When ? Still unknown.

5. Interest rates : liberalization
   

The interest rates are strongly regulated, there will be some adjustments to these rules in order to have more liberty in the setting of interest rates.

6. Private banks allowed
   

Another big change : private banking in China, yes, it's possible.

7. Land rights transfers
   

Land is property of the state in China, this is not going to cahnge but the land rights that are granted to people will be transferable, this might mean large concentration trends in agriculture.




The liberalization raises some questions : is China heading towards a free eceonomy. Maybe not yet, the simplest remark is to notice that everything in these measures is managed via the centrak state.


China remains a country with a strong centralized governement and strong public companies, this is not about to change soon.






Source : Scout Real Estate
Market Study China
Time
BBC

When is the heating turned on in apartments in Beijing ?

Heating systems in apartments in Beijing is quite varied, from floor heating to other more classical methods, but the main point is that in most of the compounds the heating is centralized so that you cannot decide when to turn it on or to turn it off.


This is really annoying some years, since you are about to discover (if you don't already know it) that Beijing winters are really harsh.


At some point you have to ask to your real estate agent or directly to your property management to know the exact date they turn the heating on.


There is nationalwise reasons for this system: China is afraid because of the importantce of the ressources needed, such as natural gas and coal. There is a state planning at the level of the whole country. Coordination is complicated, for Beijing city alone, every day in winter 41.000 tons of coal are needed, this is huge. There is environmental implications as well and this is a rising concern for Chinese leaders, sometimes coal factories have to be closed to lower air pollution levels.


The date is every year around the november 15^th, this is when Beijing begins heating. Some years this date can be a little bit earlier, up to one month earlier but this must be justified by exceptional meteorological conditions. This means that some years you might have a difficult month of october in your apartment when everything begins to freeze. There is all kinds of solutions then, essentially add some blankets...


Additional heating system are chosen, you can turn the air conditioning on on heating mode or purchase additional independant electric heaters you install in the living area.


The date can be different in some compounds. First of all, compounds considered as “diplomatic compounds” have the right to turn the heating on a monthe earlier, around October 15^th. Many luxury serviced aparment compounds have the same system of turning the hearing early on.


Some apartments have actually independant heating systems, with the issue that they tend to be more expensive. Another issue is that the heating can be too powerful, leading people to open windows in winter to cool down their apartment. In this cases, independant heating is of course more convenient.



Tip: you should aks about it to your real estate agent when you get in the apartment.

Beijing and the One Child Policy : a spectacular change occuring ?

The Chinese leaders have made important announcments regarding the one child policy last week. The date when the new measures are going to be applied is not yet revealed but it should be quite soon and obviously represents a shift in the way Chinese consider their demography.

The thing is that there is a demographic bomb, as some experts says, in China's demography and its population getting older.


What is new in the new measure announced ? Quite simple, until now to be allowed to have two kinds in China, both parents had themselves to be single childs, but when the new measure will be adopted, couples where only one of the parents is himself a single child will be allowed to have two kids.


The experts, such a Wang Feng, scholar at the Tsinghua University believe that further loosing of the one child policy are going to occur in the incoming years. This is a serious change of point of view among Chinese leaders. It is even believed that all the restrictions regarding children will be suppressed in a near future.


The current Chinese law has been adopted in 1979, to avoid a demographic boom and to ensure a smoother developemnt of the country and better living standards for China.

Some exceptions do exist now, especially in the countryside, for ethnic minorities and couples in rural areas. If the first children is a girl, it is allowed to have a second kid.

This means that the one-child policy doesn't apply to around 37% of the Chinese couples (at least this is the figure in 2007) and the fees that couple have to pay when they have additional kids is quite low for a growing number of Chinese couples that do not hesitate to pay it and have new kids.

This means that the new measure onl represent 10 million of couples, that is not so many people compared with teh overall Chinese population and this won't change a lot the demographic trends in the country.

Nevertheless; this is a very important swith in the demographic planning of the country, and might be the beginning of the end for this system.

The fear of overpopulation is over, with a birth rate in China of 1.5 child per women, quite far from the 2.1 rate which is necessary to ensure population stability, in a society obsessed with access to real estate.

The new demographic problem in China the the ageing population, consequence of three decades of birth control.

Proposed by: Scout Real Estate Beijing

New regulations from Beijing!

New regulations from Beijing! 

China is preparing to loosen the grip of the state of the economy , tackling the powerful public groups while encouraging private sector investment , with a burst of reforms announced Friday .

Central Committee of the Chinese Communist Party

The list of these reforms the second world economy , adopted by the Central Committee of the Chinese Communist Party (CCP) at the end of a completed Tuesday plenary session was delivered by China's official Xinhua news agency in a long document. If major societal changes are announced - the relaxation of the one-child policy to reduce the death penalty and the abolition of re-education through labor - much of decisions aimed at strengthen " the role of the market " in the economy. The state groups who enjoy comfortable monopolies over entire sectors , will see their room for maneuver to reduce : " By 2020 , they will pay 30 % of their profits to the government, against a current ratio 5% to 15 % , "said new China , noting that " part of their capital will be transferred to the social security fund " very faulty for years.

113 large companies in various sectors, from energy to finance to transportation, depend directly on the central government. Reducing the huge liquidity available to these groups , the measure would force them to manage their investments more efficiently , and thus moderate their excess production capacity, an endemic problem , told AFP Liu Ligang , an economist at the bank ANZ Australian- New Zealander . According to him, " it will even result in a more competitive environment." The general opinion , any reform of the public sector will, however, complicated by fierce resistance of these groups , which thrive on the lack of competition and their close relations with the authorities at all levels . The Party also multiplies the signals with respect to the private sector : " Firms in non- public capital will be allowed to take stakes in projects " initiated by state groups, according to new China without specifying how much . The plenum has called for the state groups are " owned by both private and public capital ." The authorities allow the creation of smaller banking institutions and financial institutions to private capital , said the Party document . Only a handful of private banks are currently allowed to operate in China !

Regulations restricting private investment in several service sectors will be relaxed , also notes new China. Beijing also confirmed its commitment to accelerate the liberalization of interest rates. China's central bank had raised in July its controls on lending rates , but the rates for deposits are strictly supervised. " This reform program is extremely ambitious , but the impact on the economy and markets will depend crucially on how they are implementations ," warned Wang Tao , an analyst at UBS in Hong Kong. Party leaders also undertake to move towards free convertibility of the yuan - ie the ability to buy and sell freely the Chinese currency - a long- term repeated regularly by the government. Convertibility without control might at first be realized in the free zone recently launched in Shanghai (east).

The government should just create new zones , and extend the reforms previously launched on an experimental basis on limited areas , noted the official news agency . As real estate prices continue to soar , a property tax - already implemented in two cities - could be " extended to other cities," the document adds Party , not to mention timing.

Local governement ! 

For their part, local governments heavily indebted , " will be allowed to diversify their incomes by raising funds through bond issues " - which will give them a source of income other than real estate transactions. So far, only a few cities, including Shanghai, issue their own bonds. Furthermore, " the consideration of debt levels in the evaluation of management ", " lower participation of local governments in enterprises" , as " the management of certain costs by Beijing " administrative levels of below will help " curb any swelling of local debts ," said Wang Tao.

Finally , farmers will be granted rights to " possess, use and transfer the land they cultivate , and can use their property rights as collateral " for financial transactions , said new China. So far , all agricultural land are officially owned by the state, which gives enjoyment to farmers.

Tips about renting an apartment in a Beijing Hutong

Beijing Hutongs are these alleys in the Chinese capital city located mostly in the second ring road, that are what is left from the antique Beijing. Renting an apartment there can be great but be warned, the dream can be a kind of nightmare i you are not careful about a few things.

There is actually, to be oversimplistic but clear, two kinds of Hutongs. The renovated ones and the non renovated ones. The renovated Hutongs are simply fantastic to live in, but tey are now dramatically expensive. A few years ago, Chinese people tried to flee those areas that are associated with poor people in bad housing in China, but this is changing. The renovated Hutongs are now more and more expensive, rents have reached records heights and this is now very difficult to find an affordable one. If you have such financial means, take the opportunity, you won't regret it. Amazing places are for rent now.

If you can't rent a renovated Hutong, have a look on the non renovated ones or the ones that have been renovated but are still affordable, they do exist. You can find your dream Hutong by looking around, but this is not necessarily easy and you have to be a little bit careful.

You have to see generally the standard of the Hutong you are about to rent, is it a general good state or not, and have a look at very basic things such as the way the door closesn if it closes. This is true for the door of your apartement but check as well the door of the whole courtayrd that gives access to your apartment, to avoid bad surprises such as burglars.

Of course, have a look on the bathroom and if there is a bathroom, since many hutongs have common bathrooms are outside of the apartment, in a kind of spartiat comfort. Check if there is enough water pressure, if the water is hot and the state of the kitchen.

It is more convenient to rent a place which is not too far away inside the hutongs since this is going to be difficult to get there. It can be difficult to have your taxi to get you there and parking a car will be impossible, you ll have to rely on your feet and maybe the subway (but there is few subway stations inside the hutongs).

The intimacy can be a problem in the Hutongs since the accomodation are kind of imbricated. Check quickly the neighbours and make sure they are not some kind of lunatics.

See as well that the hutong you are going to live in has passed treatment against bugs.

Now, with these simple ideas go and look for your Hutong, the best type of apartment you can find in Beijing.

Where is the best place to settle a wineyard in China? China and its new wines.

There is a quest currently going on in China, with essential things are at stake: where is the best place to produce wine in China? Teams of experts are exploring the country, doing experiments, observe the soil, the surrounding, measure the humidity, plan new kinds of grape. This is in China today and this is something complicated in a country that wants everything big.


The things are going on, and on the places that have been experimented great hopes are rising, because betwenn 2007 and 2012, the wine consumption in China has more than doubled and the furure looks even more promising with an expected 40% increase before 2016.


Many actors from all over the world are trying to find the most suited location, many french groups, leaders in this field are leading the search.


For Domains Baron de Rotschild, the best place should be in Penglai, which is an humid peninsula in the east of Shandong province. LVMH, with its brands Moët & Chandon, Veuve Cliquot and Dom Pérignon have chosen the Ningxia province, a province in the south and are trying to design a sparkling wine there. There is another attempt in Yunnna well under way since the first producton is expected there this year.

Nothing is yet sure and everything is uncertain. There is no place with ideal weather, Ningxia is arid, Shandong has heavy rains during the year, Yunnan in mountain areas has a tempered weather but with a tropical influence as well.

Everything needs to be proven in any of these locations, Nigxia seems to be the leader in favourite place, currently. In september 2011, Wine produced from Ningxia won some awards, including a prestigious prize in teh London World Decanter awards.

Good wine can be produced there but there is a market issue: Chinese people are not aware of it.

The good quality of wine is a long and complicated process, in all those places producing good quality of wine will take years. Experiments and adjustments will be made before good wine can be produced there.

Wine is not something really new in China, it has been inroduced in 1892 in Shandong with Cabernet Sauvignon grapes, Shandong. The difficulty there s to adapt the wine production to the heavy humidity, specific techniques have to be designed. The quality results are uncertain there as well as it is being improved.

The funny thibg is that there is couterfeit bottles of the abovementioned brands in areas where the production has not begun. This is the Chinese effect.

Source : AFP

Cafés, Coffee, Tea and consumer lifestyle in China

There is still strong appeal for Western lifestyle in China, and a large part of the population that is attracted by such places belongs to this category in China. The values there are quality of life, and with western culture comes coffee drinking and alcohol. The coffee prepared in a professionnal way and good quality wine is type of products that are favored by them, together with the specific atomosphere of coffee shop and bars. This is something growing as a trend in China and its middle class looking for apartments.

Cafés

The top brands with most success are UBC Café, with 25% of market share, but this brand has a speciality in third tiers cities. In first and second tier cities, Starbucks and Costa Cofee still have more important market shares. The market is nor really mature and is expected to grow steadily around 9% in the incoming years.

The rise of Chinese consulers within the last decades has been spectacular and many changes are still to be expected, even if the economy is slowing ; The customers are more mature and more sophisticated, and they are caring more about the quality of the food and drinks.

Coffee

This implies a change in the food consumption habits. Coffee sales are growing, with 10% growth a year, an impressive figue but lightly slower than in the previous years. The growth is sustained thanks to Cafés but as well thanks to domestic consumption.

Nestlé is still the leader on this market, with 72% market share in value sales. The company is doinbg a lot of research, a lot of marketing, a very efficient distribution network and a very good image, a very good reputation built in China, and the value sales are still increasing in 2012 and 2013.

The prospects are stable, the coffee demand is expected to grow by 9% in the next years. The Chines consumer is expected to drink more coffee per capita, with a more sophisticated consumer behaviour that leads to the consumption of premium coffee.

Tea

In the same time, the tea market is evolving differently. Bad news about overuse of pesticides in China have let to consumer confidence about tea. This might explain a slower growth in 2012 and 2013.

The leading brands are Guangdong Strong and Xiangpiaopiao. Packaged tea is developping while loose tea is loosing advantage. Package tea is expected to become the norm.

Market data evolution ; Home furnishing and Home improvement in China

Home improvement
The home improvement market in China is evolving, with an evolution of the population which is now urbn population for 52,6% in 2012, one percent more than in 2011. This implies a demand for new houses, there is a context for new houses and home improvement. this is simple : there is a double digit growth in 2012.

A company has gained nation recognition on this market, but the market is extremely fragmented and there is no real leader : Hangzhou Nabel group has only a 2% market share. The company is having a lot of communication activity, with a lot of prospects.

The government in China is determined to control housing prices, which means that the housing industry might have lowe growth rate. Still there is governemental plans to build 36 millions affordable homes to help young Chinese people to access he new « Chinese dream ».

Another trend is that landlords that want to have substantial gains on their real estate sales have an incentive to renovate the apartments. This might be an evolution towards a much more mature market.

Furniture

About the furniture market, there is a strong cultural trend : the culture of parents buying houses for their children makes that there is a constant demand for home furnshing products. The prices are now so high that the burden of buying a new apartment is now shared by parents and children. Still, parents buy home furnishing products for their children, home textile and furniture. This incentive has helped this economic area to grow in 2012.

Among the leaders in this area, IKEA in China, with 5 billion RMB sales in 2012 and is planning to open new stores in 2013. Still, a large part of the market is very fragmented. The growth prospect is expected to be around 8% in the incomn years, which is not really a strong growth compared with the past trend on this market, but then again, China is still growing, people coming from the Chinese rural areas are going to make growth.

This market has important prospects if the Chinese market becomes more mature. These are fragmented markets with hundred of tousands of small producers that will continue to domainate the market, while there is a growing sector of cheap furniture for exportation is positive for the furniure industry.