What Trade War? The Chinese Consumer Is Back

The trade war between the U.S. and China has fueled concerns over the spending power of the Chinese consumer, but luxury retailers should fear not, according to HSBC. A report by the investment bank predicts that a revival in Chinese consumption will once again help boost the global luxury sector, with Kering, Swatch, Richemont, SMCP and Burberry among the high-end retailers who stand to benefit. The comeback has in part been driven by a strong RMB relative to currencies in countries where luxury consumption happens. “The stronger RMB bodes well for luxury consumption outside of China, as Chinese consumers tend to shop after the weaker currency,” Erwan Rambourg, global co-head of consumer and retail research at HSBC, said. “We think that both the fashion trends and the proximity make countries like Japan appealing to our Chinese tourists, but as we’ve seen in our China Deluxe surveys, France and other countries in Europe are always high on the aspirational destinations list.” Other supportive factors include the easing of visas in many destinations, which makes it easier for Chinese tourists to travel, although HSBC thinks that the action will happen more in Asia than in Europe due to security concerns, and the U.S. because of cost concerns. But

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