I've written here before about the possibility that the clampdown in corruption in China (such as it is) might have an impact on luxury goods sales. You can read past blog postson the matter here and here. Is it happening yet?
Forbes notes that the "back rooms of Beijing restaurants" were "strangely quiet" in the run up to Chinese New Year in February, with some of the usual government banquets actually cancelled outright. At the same time, the anti-corruption campaign has already netted a good number of thieving bureaucrats and the public are increasingly willing to "take to social media to vent their disgust with government misbehaviour."
So what's a good indicator to watch if you are following all this? It could be mistresses. The rich and powerful in China have a long history of keeping numerous mistresses and recent years have seen no change to this trend: a recent study from the Renmin University of China showed that some 60% of Chinese officials under investigation for corruption have been keeping a full-time mistress, while The Times reports on one official who was found to be keeping some 47 mistresses "a feat of romantic devotion that theoretically should be light years beyond his meager civil servants salary."
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The obvious problem for officials on the take is that having a mistress is expensive (love isn't worth much to unmarried young women in modern China, but luxury goods are) and so isin itself an indicator of corruption. But there is a new problem mistresses are harder to keep secret than they once might have been.
As Forbes puts it, "mistresses of local officials or state company bosses cannot resist posting photos of themselves with luxury handbags, a new car or on a spa vacation. In most cases, they get the attention they crave". Internet onlookers call for their boyfriends' heads.
All this appears to be having an effect. The Times' Leo Lewis, writing from Beijing, has visited a swish granite-clad 30-story apartment block "that comes with a bit of a reputation". It is here that the mistresses of senior Communist officials are said to be "maintained in boutique studio flats".
It is a localised cluster of the mistress economy supporting a hub of hairdressers, car dealers ("outside the factory floor in Modena it is hard to imagine such a concentration of Maseratis") and jewellers. It is also in "slow collapse" as the flats are slowly vacated and "sales have evaporated in a new climate of fear." We've been wary of luxury goods shares for some time. I think we still are.
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
-
Beating inflation takes more luck than skill – but are we about to get lucky?Opinion The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank of England may be about to get lucky.
-
Rishi Sunak can’t fix all our problems – so why try?Opinion Rishi Sunak’s Spring Statement is an attempt to plaster over problems the chancellor can’t fix. So should he even bother trying, asks Merryn Somerset Webb?
-
Young people are becoming a scarce resource – we should value them more highlyOpinion In the last two years adults have been bizarrely unkind to children and young people. That doesn’t bode well for the future, says Merryn Somerset Webb.
-
Ask for a pay rise – everyone else isOpinion As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why you should do that too.
-
Why central banks should stick to controlling inflationOpinion The world’s central bankers are stepping out of their traditional roles and becoming much more political. That’s a mistake, says Merryn Somerset Webb.
-
How St Ives became St Tropez as the recovery drives prices sky highOpinion Merryn Somerset Webb finds herself at the epicentre of Britain’s V-shaped recovery as pent-up demand flows straight into Cornwall’s restaurants and beaches.
-
The real problem of Universal Basic Income (UBI)Merryn's Blog April employment numbers showed 75 per cent fewer people in the US returned to employment compared to expectations. Merryn Somerset-Webb explains how excessive government support is causing a shortage of labour.
-
Why an ageing population is not necessarily the disaster many people think it isOpinion We’ve got used to the idea that an ageing population is a bad thing. But that’s not necessarily true, says Merryn Somerset Webb.
