Biz Unusual

Yachts 'not just for pleasure'

By Zhu Chengpei and Zhang Xiaomin (China Daily)
Updated: 2010-07-22 11:11

Yachts were on display at the Dalian Yacht Show held on July 8 in Dalian, Liaoning province. [Wang Xizeng / for China Daily]

DALIAN, Liaoning - In the eyes of most Chinese, yachts are luxuries associated with an ostentatious life of leisure. Insiders, however, think differently.

"Do you really believe the rich are buying yachts to burn money? It's quite the contrary," Wang Huaiyong told China Daily aboard his boat at a marina in Dalian, Liaoning province.

Wang, 35, sails for his boss. The cost of the boat, he said, amounts to some 2,000 yuan ($295) a day, even when it stays in the dock - 400 yuan more than the city's monthly per capita income in 2009.

"The bosses are buying yachts to help earn more money," said Wang, who has been working the marina at Xinghai Bay since it opened in 2005. The marina, with its 79 berths, is now home to more than 70 yachts.

Wang said the yachts are status symbols that also offer privacy for their owners who sometimes entertain friends and business partners aboard with parties, fishing expeditions or simply trips to enjoy the sea view.

But among the most important results of these meetings, Wang noted, are the business deals that can be negotiated in these agreeable environments.

Thus there is, by all accounts, a very fast-growing need for such vessels in China. Moreover, according to the 2010 Hurun Wealth Report, there were 875,000 multimillionaires on the mainland as of the end of 2009, up 6.1 percent year-on-year. The number of people whose wealth amounted to at least 100 million yuan and 1 billion yuan were 55,000 and 1,900 respectively.

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In a recent example of how yachts can benefit their owners, a real-estate developer surnamed Mu was seen in talks at the marina's Dalian Yacht Show, held earlier this month, to buy a 7-million-yuan yacht. The man, according to Wang, sought to buy a yacht to make his newly built lakeside villas more attractive to prospective high-end clients.

Yachts that cost between 6 to 7 million yuan are the most popular in the Chinese market, said Ying Chuntian, a sales representative with the Shanghai Choisi Yacht Co.

"For personal use, the boats are mostly not longer than 50 feet (15.24 meters)," said Ying. "For business purposes, the bigger, tailor-made ones are more common."

Zhu Jianan, a regional manager for Italian-based Azimut Yachts, said no less than 30 Azimut boats have been sold in China - including the country's most luxurious one, the Azimut 98 Evolution. Zhu said the boat costs the owner more than 100 million yuan to buy and transport to the Dalian marina.

Seeing this great potential, local manufacturers are making adjustments to meet the requirements of business functions. Dalian Songliao FRP Marine Company, which sold 30 boats to Chinese buyers in 2009, has begun to focus on the production of medium-sized 50 to 85 feet long boats, according to general manager Zhang Desheng.

Zhang said the domestic market is expected to contribute to 70 percent of the company's annual sales volume in the coming years.

Against this backdrop, not surprisingly, China has become the world's second-biggest consumer of luxury goods. Statistics of the World Luxury Association show China's total consumption value of luxury goods soared to 9.4 billion yuan, accounting for 27.5 percent of global consumption in 2009.

Currently, the country has 64 yachting clubs and marinas, said Yang Xinfa, vice-chairman of China Association of the National Shipbuilding Industry. They are mainly located in the economically developed areas on the southeast coast such as Sanya, Xiamen, Shanghai and Qingdao.