Status symbols of China's ultra-rich

Motor boats at Longcheer Yacht Club, Shenzhen China
For boat manufacturers, the yachting market of the future is China, where luxury sailing yachts and motorboats are becoming the ultimate accessory of the super-rich. New marinas are being developed, and the government is promoting sailing ahead of next year's Olympics

It is a beautiful, sunny day at Hong Kong's International Boat Show, held at Marina Cove, Sai Kung. Boat lovers from around the region take off their shoes and step carefully onto the stunning - and very expensive - luxury yachts being displayed by leading international manufacturers.

Some of the potential customers are from Mainland China, such as the man from Shenzhen who made his fortune in the chemicals industry. He says he bought a sailing boat last year, and now he wants to buy a motor yacht, too.

China's market for pleasure boats is still in the infancy stage. Just 400 private boats are registered nationwide, and almost all of them are motorboats. But Adrien Magnan of Marine Dragon Consulting in Shanghai, which specializes in the Chinese yachting industry, says the amount spent on luxury boats has been leaping upwards by tens-of-millions of dollars in the past few years.

'If you look at the increase, it's about 100 percent every year,' he explained. 'So 2005 was about US$30 million, 2006 was about US$50 million, and now we are exceeding US$100 million in imports of yachts. And so, if next year it will be $200 or $400 (million) - in a few years it will catch up with countries like Italy or France in Europe. I wouldn't be surprised to see China in the top five markets in less than five years.'

There are about half-a-million U.S.-dollar millionaires in China today. Sales of luxury items there are skyrocketing, and yachts are becoming the ultimate accessory of the ultra-rich. Mike Simpson, owner of Hong Kong-based yacht dealer Simpson Marine, started selling boats in China three years ago. He says his wealthy Chinese customers are seeking a Western lifestyle.

'As soon as they have money, they are all reading these lifestyle magazines. It's almost like step-by-step,' he explained. ' Right now, we have this sort of money, and I have reached sort of this level of my success. Now, to show it to the world, what do I need to do?' So, obviously, it's the fast cars, it's the Bentley or whatever it is, and then the very smart house, which will probably be French Renaissance - and they get European architects to design it for them - then, of course, the European fashion and, now, it comes to the yachts - the yacht is part of that whole thing.'

The China International Boat Show (CIBS) in Shanghai has already become one of Asia's largest. Smaller marine fairs are held in Qingdao and Dalian in northeastern China and in Shenzhen and Zhuhai in the South.

Pleasure sailing, virtually unheard of in China until a few years ago, is becoming increasing popular. Last month, around 60 teams sailed across the border from Hong Kong to Shenzhen in the China Cup Regatta, the country's first ‘big boat’ regatta. Last summer, a Chinese team participated in the Louis Vuitton Cup, the challenger selection series before the America's Cup, the world's most famous sailing competition, for the first time.

Mike Simpson says the government is promoting sailing because of next year's Olympic Games in Beijing.

'They have the sailing Olympics in Qingdao this summer,' he noted, 'and that has really given an impetus to the boat market, and they have really been pushing local governments to encourage sailing schools, and marina development, that kind of thing, to try to build up, as we realize now, sort of an infrastructure at ground level, a grassroots development of yachting.'

Adrien Magnan says that despite China's long coastline and many lakes, there are fewer than 10 marinas on the whole mainland, with a total of about 1,000 moorings. But he says more are being developed, for example in Xiamen on the East Coast or on Hainan Island in the Southeast, as local governments realize the positive economic impact of marinas.

'Definitely. I mean, they are trying to open the coastline to the rest of the world,' he said. It creates business, it creates real local economy. A marina is more than a place where you park yachts. It's a real profit-maker for the whole city in terms of brand image, in terms of attractiveness of a city, and it generates, of course, revenues and employment for the city.'

Both Magnan and Simpson say a lack of infrastructure, expertise and repair facilities are some of the challenges for the development of China's yachting industry. But they say the biggest obstacle is a lack of uniform regulations.

The status of pleasure motor yachts has not yet been clarified, and there is no national system for licensing sailors. If a skipper wants to sail a yacht from one province to another, for example from Shanghai up the coast to Qingdao, he has to get cruising permits from the authorities in each location.