China: forget fancy handbags and look to caustic soda

Luxury goods are booming in China. But as a gauge of the country's economic health, fancy handbag sales won't tell you much, says Merryn Somerset Webb. If you want the truth on China, look to caustic soda sales.

China and high end goods: they're a combination made in money heaven. That, at least is the current view of the industry, of much of China's population and of course of the global stock market. You can see why.

Look at UK fashion company Burberry. Not long ago it was a relatively staid UK brand. Today it has a market capitalisation of £5.9bn with a recently reported 39% rise in profits. And the likes of Louis Vuitton, Gucci and Prada regularly report sales up 40% plus in China. The boom seems unstoppable. Prada has 22 stores in China already, and late last year said it intended to open another 50 over the next three years.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.