While the luxury houses make China their new base, the Chinese government seems to have other things in mind. Not taking too kindly to the new growing trend of extravagance among its citizens, the government has decided to take matters into its own hands as far as curbing extravagance and waste goes. The Xinhua state news agency said on Wednesday that Chinese radio and television stations are to ban advertisements for expensive gifts such as watches, rare stamps and gold coins. As per the statement released by the State Administration, such advertisements “publicized incorrect values and helped create a bad social ethos.”
The ban follows closely in the footsteps of China’s president-in-waiting Xi Jinping, calling for a renewed fight against graft. The ban is likely to take a toll on the luxury houses that promote their products through radio and television. Hengdeli and Emperor Watch and Jewelry, who are among the biggest watch retailers in China, both saw a fall in their shares on Wednesday. In China, liquor and watches are being viewed as a symbol of graft these days. Xi has said time and again that failure to curb corruption and extravagance would put the ruling Communist Party’s survival in jeopardy. Thus, this drive against extravagance is expected to grow even stronger as Xi readies to take over as president at an annual meeting of parliament in March.
Will the luxury houses withstand this ban, or will they seek a new market? Only time will tell.
[BBC]
