China’s Former Security Chief Zhou Yongkang Sentenced to Life in Prison

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Media captionZhou Yongkang is the most senior Chinese politician to be put on trial for corruption

China's ex-security chief Zhou Yongkang has been jailed for life - the most senior politician to face corruption charges under Communist rule.

He was found guilty of bribery, abuse of power and "intentionally disclosing national secrets", China's official Xinhua news agency reports.

Until his retirement in 2012, Zhou was one of China's most powerful men.

He was put under investigation one year later as part of President Xi Jinping's major anti-corruption campaign.

State TV showed a clip of Zhou, 72, pleading guilty at a closed-door trial in the northern city of Tianjin. When responding to the judge, he said he would not launch an appeal.

"I've realised the harm I've caused to the party and the people. I plead guilty and I regret my crimes," he said.

Power politics exposed by fall of China's security boss

Analysis: Celia Hatton, BBC News, Beijing

The verdict caught many people off guard.

It was expected that Zhou Yongkang's trial would be played out for the Chinese public; his failings strung out for every citizen to see.

In similar high-profile cases, like that of Zhou's protege, Bo Xilai, the foreign and Chinese media were given 48 hours' notice that Bo's trial would begin. Reporters camped outside the courthouse for days, breathlessly waiting for updates.

In March, the head of China's Supreme People's Court had promised that Zhou Yongkang's trial would be "open in accordance with the law". The trial was set to take place in the eastern port city of Tianjin. It seemed Zhou was set to follow Bo's pattern. Like other senior officials convicted of serious crimes, it was expected he would receive a suspended death sentence.

Months passed without any word. Some guessed that Zhou Yongkang was not co-operating with prosecutors. Others believed that his crimes were too much of an embarrassment for the government.

After all, Zhou Yongkang had held a seat at the very top of the Chinese government pyramid. If he was thoroughly corrupt, some in China might ask whether others at the top were rotten too.

In the end, the decision to keep Zhou Yongkang's trial secret matches the case surrounding him, and Zhou's own public persona: inaccessible and secretive.

China's Xinjiang Region Hit by More Attacks

Chinese authorities say two attacks in the country's remote region of Xinjiang have left at least 19 people dead, including five attackers, and injured more than 40 others.
Chinese officials say the two incidents, which occurred late Saturday evening and then again on Sunday afternoon in the city of Kashgar, were both terrorist attacks. Authorities also said that at least one of the leaders of Sunday’s attack received terrorist training in Pakistan.
Bomb blasts
Chinese state media say the spree of violence in Xinjiang began when two bombs shook the streets of Kashgar. Authorities say an hour after the blasts on a nearby street, two attackers hijacked a truck, killed its driver, and then drove it into a crowd of pedestrians. Chinese media reported the attackers then got out of the truck and began stabbing people who were passing by.

The Kashgar city government says eight bystanders were killed in the violence, one attacker was killed and another was apprehended.

On Sunday afternoon, authorities said a bigger group of men carried out the second attack, stabbing the owner of a restaurant and a waiter and then setting it on fire. The attackers then ran out of the restaurant and began stabbing bystanders randomly, killing four and wounding 15 others. Chinese media reported four of the attackers were shot dead after leaving the restaurant and another died later at the hospital.
Uighurs accused
The Kashgar city government issued an arrest warrant for two of the attackers, who escaped, and offered a reward of more than $15,000 for any information that leads to their capture. Both are members of Xinjiang's Uighur minority group.
The city government identified the two as 29-year old Memtieli Tiliwaldi and 34-year old Turson Hasan.

The Kashgar city government says that based on a confession from one of the alleged attackers, at least one of the group's leaders who participated in Sunday's attack received firearms and explosives training in Pakistan and then later returned to Xinjiang.

The statement says the leader received training from a Pakistan-based camp of the East Turkestan Islamic Movement, a banned organization that seeks independence for Xinjiang. A spokesman with the Kashgar city government could not be reached for comment.
Ethnic tensions
Xinjiang is home to millions of Muslim Uighurs, who are angry about what they say has been decades of repressive rule by Beijing and the unwanted immigration of China's dominant Han ethnic group.

Dilxat Raxit, the spokesman for the World Uighur Congress, questioned China's account of the events and says the lack of legitimate means to voice grievances in the region may drive some to violence.
There there is no way for Uighurs to protest through peaceful means, he said, and that Beijing has to acknowledge its responsibility in what has happened in the area. From what he has heard, people in Kashgar have been forbidden from leaving their homes and authorities have detained more than 100 people, Raxit said.
Growing unrest

The two attacks wrap up what has been a violent month for Xinjiang.
Less than two weeks before the attacks in Kashgar, a group of 14 men allegedly stormed a police station. According to government accounts of the incident, 18 people were killed after the men took hostages. Fourteen of those who died were the attackers. Four remain in custody and authorities have released no additional information - such as their names or what might have possibly brought on the attack.

During that attack Chinese terrorism analysts suggested that links to terrorist groups in Pakistan could have been a factor. World Uighur Congress spokesman Raxit says that the Chinese government always tries to link such incidents to terrorism.

The Chinese government uses repressive measures against demonstrations, he said, and tries to avoid responsibility by linking every act of protest to terrorist organizations.
China denies the claims of the World Uighur Congress and in turn has accused the group of masterminding a riot in Urumqi in 2009, that left nearly 200 people dead.
Most of the casualties were members of China's Han ethnic group.

China's Xinjiang Region Hit by More Attacks

Chinese authorities say two attacks in the country's remote region of Xinjiang have left at least 19 people dead, including five attackers, and injured more than 40 others.
Chinese officials say the two incidents, which occurred late Saturday evening and then again on Sunday afternoon in the city of Kashgar, were both terrorist attacks. Authorities also said that at least one of the leaders of Sunday’s attack received terrorist training in Pakistan.
Bomb blasts
Chinese state media say the spree of violence in Xinjiang began when two bombs shook the streets of Kashgar. Authorities say an hour after the blasts on a nearby street, two attackers hijacked a truck, killed its driver, and then drove it into a crowd of pedestrians. Chinese media reported the attackers then got out of the truck and began stabbing people who were passing by.

The Kashgar city government says eight bystanders were killed in the violence, one attacker was killed and another was apprehended.

On Sunday afternoon, authorities said a bigger group of men carried out the second attack, stabbing the owner of a restaurant and a waiter and then setting it on fire. The attackers then ran out of the restaurant and began stabbing bystanders randomly, killing four and wounding 15 others. Chinese media reported four of the attackers were shot dead after leaving the restaurant and another died later at the hospital.
Uighurs accused
The Kashgar city government issued an arrest warrant for two of the attackers, who escaped, and offered a reward of more than $15,000 for any information that leads to their capture. Both are members of Xinjiang's Uighur minority group.
The city government identified the two as 29-year old Memtieli Tiliwaldi and 34-year old Turson Hasan.

The Kashgar city government says that based on a confession from one of the alleged attackers, at least one of the group's leaders who participated in Sunday's attack received firearms and explosives training in Pakistan and then later returned to Xinjiang.

The statement says the leader received training from a Pakistan-based camp of the East Turkestan Islamic Movement, a banned organization that seeks independence for Xinjiang. A spokesman with the Kashgar city government could not be reached for comment.
Ethnic tensions
Xinjiang is home to millions of Muslim Uighurs, who are angry about what they say has been decades of repressive rule by Beijing and the unwanted immigration of China's dominant Han ethnic group.

Dilxat Raxit, the spokesman for the World Uighur Congress, questioned China's account of the events and says the lack of legitimate means to voice grievances in the region may drive some to violence.
There there is no way for Uighurs to protest through peaceful means, he said, and that Beijing has to acknowledge its responsibility in what has happened in the area. From what he has heard, people in Kashgar have been forbidden from leaving their homes and authorities have detained more than 100 people, Raxit said.
Growing unrest

The two attacks wrap up what has been a violent month for Xinjiang.
Less than two weeks before the attacks in Kashgar, a group of 14 men allegedly stormed a police station. According to government accounts of the incident, 18 people were killed after the men took hostages. Fourteen of those who died were the attackers. Four remain in custody and authorities have released no additional information - such as their names or what might have possibly brought on the attack.

During that attack Chinese terrorism analysts suggested that links to terrorist groups in Pakistan could have been a factor. World Uighur Congress spokesman Raxit says that the Chinese government always tries to link such incidents to terrorism.

The Chinese government uses repressive measures against demonstrations, he said, and tries to avoid responsibility by linking every act of protest to terrorist organizations.
China denies the claims of the World Uighur Congress and in turn has accused the group of masterminding a riot in Urumqi in 2009, that left nearly 200 people dead.
Most of the casualties were members of China's Han ethnic group.

Fascinating fortunes: Our rich list obsession

The new Forbes list of the world's richest people shows that there are more than 1,200 billionaires across the globe. With Russian and China boasting more than 100 billionaires each, a level previously only reached by the United States, is the western obsession with ranking wealth spreading?

It is a rather recent phenomenon: an obsession with just how wealthy rich people are.

Americans seem to have become fascinated by wealth first; US newspapers produced rich lists from public filings at least 90 years ago, maybe much longer.

But the rich list obsession got a great push from the American magazine Forbes, in 1982.

Forbes was very much a family concern, started by the once impoverished Scottish immigrant BC Forbes in 1917.

Forbes was obsessed with success in business. Success was charted by net worth, somebody's personal assets minus their borrowings.

BC Forbes' son, the flamboyant Malcolm, decided that other people wanted to know how rich other people were. Maybe even the rich wanted to know. Forbes sleuths pieced the evidence together and came out with a figure.


Click to play
AdvertisementWatch: Steve Forbes on the spread of wealth
Then they drew up a score card, the Forbes 400. It was an obvious counter play to the rival magazine Fortune's list of the top US companies, the Fortune 500, started 27 years earlier in 1955.

Correct or not, the Forbes 400 rich list tended to stick. Different publications came up with completely different results, suggesting rich list compiling was very much an art not a science (a bit like auditing and accounting, really).

But the huge variations did not appear to undermine the attractions of reading lists of rich people, and speculating about them in a league table of wealth in which participants moved up or down year after year, as events, mistakes and the passing scene impacted on their incomes, outgoings and perceived wealth.

Inherited wealth

When they died, their fortunes were divided up. Many of the American participants in the Forbes Rich List owe their position solely to inheritance: 74 of the 400 in 2009.

Continue reading the main story
Forbes' top five billionaires

Carlos Slim $74bn (£45bn) America Movil, telecoms

Bill Gates $56bn (£34bn) Microsoft, software

Warren Buffett $50bn (£30bn) Berkshire Hathaway, investment

Bernard Arnault $41bn (£25bn) LVMH, luxury goods

Larry Ellison $39.5bn (£24bn) Oracle, software

Source: Forbes
In some cases a fortune is big enough to create several family members in the List, like the Walton inheritors of the Walmart billions.

Inherited wealth has not yet had time to happen in China. But the Forbes Rich List idea has grown internationally over the years, and it does not seem to lose its potency.

Most countries now seem to have at least one list of the richest, the most powerful, the smartest, and circulations rise whenever the lists are published.

Readers love thinking about wealth, matching the money to the personal histories of people they do not know and will never meet.

The obvious unspoken questions are "Are they beautiful? Are they happy? What did they sacrifice to get on the list?"

Meanwhile, the global rich have lost their reticence, if they ever had such a thing. What use is wealth if you cannot flaunt it?

Sales of luxury goods are booming all over the world. Hence the extraordinary boom in luxury watches, wealth you can wear on your wrist and flourish to others whenever you need to know the time.

The new breed of Chinese private entrepreneurs is in a bit of a bind when it comes to proclaiming their wealth.

'Tall poppy syndrome'

They are proud, very proud of what they have achieved.

But in a controlling state such as China, they can never be sure that flaunting their wealth will not attract the attention of the authorities, nervous about private power though its development has been one of the key things propelling the Chinese economy over the past 30 years.

Australians call it the "tall poppy syndrome", the way that successful people are pulled back down to earth by jealousy or official action, often from the tax man.

Continue reading the main story
Find out more

Global Business is broadcast on the BBC World Service from Saturday 23 April 2011.

Listen via the BBC iPlayer
Or download the podcast
It must have changed by now, but for some recent years in China the most popular car for the new rich was the American Buick, a big car but not a flashy brand; a defensive stance about showing your wealth.

It has taken an Old Etonian Englishman with a Dutch name, Rupert Hoogewerf, to grasp the Chinese Rich list opportunity.

A qualified chartered accountant with a degree in Chinese and Japanese, Rupert Hoogewerf launched his list of China's richest people (by his own estimation) in 1999.

That has grown into Hurun Report, a publishing empire which includes lots of China lists and magazines.

It gives some fascinating insights into China's rapid business changes, and the emergence of a new entrepreneurial elite.

Hurun is the Chinese transliteration of Hoogewerf, by the way.

Like BC Forbes, it is quite a good idea to get your name on the front of the magazine, and to use it to make a small fortune out of other people's great big fortunes.

Fascinating fortunes: Our rich list obsession

The new Forbes list of the world's richest people shows that there are more than 1,200 billionaires across the globe. With Russian and China boasting more than 100 billionaires each, a level previously only reached by the United States, is the western obsession with ranking wealth spreading?

It is a rather recent phenomenon: an obsession with just how wealthy rich people are.

Americans seem to have become fascinated by wealth first; US newspapers produced rich lists from public filings at least 90 years ago, maybe much longer.

But the rich list obsession got a great push from the American magazine Forbes, in 1982.

Forbes was very much a family concern, started by the once impoverished Scottish immigrant BC Forbes in 1917.

Forbes was obsessed with success in business. Success was charted by net worth, somebody's personal assets minus their borrowings.

BC Forbes' son, the flamboyant Malcolm, decided that other people wanted to know how rich other people were. Maybe even the rich wanted to know. Forbes sleuths pieced the evidence together and came out with a figure.


Click to play
AdvertisementWatch: Steve Forbes on the spread of wealth
Then they drew up a score card, the Forbes 400. It was an obvious counter play to the rival magazine Fortune's list of the top US companies, the Fortune 500, started 27 years earlier in 1955.

Correct or not, the Forbes 400 rich list tended to stick. Different publications came up with completely different results, suggesting rich list compiling was very much an art not a science (a bit like auditing and accounting, really).

But the huge variations did not appear to undermine the attractions of reading lists of rich people, and speculating about them in a league table of wealth in which participants moved up or down year after year, as events, mistakes and the passing scene impacted on their incomes, outgoings and perceived wealth.

Inherited wealth

When they died, their fortunes were divided up. Many of the American participants in the Forbes Rich List owe their position solely to inheritance: 74 of the 400 in 2009.

Continue reading the main story
Forbes' top five billionaires

Carlos Slim $74bn (£45bn) America Movil, telecoms

Bill Gates $56bn (£34bn) Microsoft, software

Warren Buffett $50bn (£30bn) Berkshire Hathaway, investment

Bernard Arnault $41bn (£25bn) LVMH, luxury goods

Larry Ellison $39.5bn (£24bn) Oracle, software

Source: Forbes
In some cases a fortune is big enough to create several family members in the List, like the Walton inheritors of the Walmart billions.

Inherited wealth has not yet had time to happen in China. But the Forbes Rich List idea has grown internationally over the years, and it does not seem to lose its potency.

Most countries now seem to have at least one list of the richest, the most powerful, the smartest, and circulations rise whenever the lists are published.

Readers love thinking about wealth, matching the money to the personal histories of people they do not know and will never meet.

The obvious unspoken questions are "Are they beautiful? Are they happy? What did they sacrifice to get on the list?"

Meanwhile, the global rich have lost their reticence, if they ever had such a thing. What use is wealth if you cannot flaunt it?

Sales of luxury goods are booming all over the world. Hence the extraordinary boom in luxury watches, wealth you can wear on your wrist and flourish to others whenever you need to know the time.

The new breed of Chinese private entrepreneurs is in a bit of a bind when it comes to proclaiming their wealth.

'Tall poppy syndrome'

They are proud, very proud of what they have achieved.

But in a controlling state such as China, they can never be sure that flaunting their wealth will not attract the attention of the authorities, nervous about private power though its development has been one of the key things propelling the Chinese economy over the past 30 years.

Australians call it the "tall poppy syndrome", the way that successful people are pulled back down to earth by jealousy or official action, often from the tax man.

Continue reading the main story
Find out more

Global Business is broadcast on the BBC World Service from Saturday 23 April 2011.

Listen via the BBC iPlayer
Or download the podcast
It must have changed by now, but for some recent years in China the most popular car for the new rich was the American Buick, a big car but not a flashy brand; a defensive stance about showing your wealth.

It has taken an Old Etonian Englishman with a Dutch name, Rupert Hoogewerf, to grasp the Chinese Rich list opportunity.

A qualified chartered accountant with a degree in Chinese and Japanese, Rupert Hoogewerf launched his list of China's richest people (by his own estimation) in 1999.

That has grown into Hurun Report, a publishing empire which includes lots of China lists and magazines.

It gives some fascinating insights into China's rapid business changes, and the emergence of a new entrepreneurial elite.

Hurun is the Chinese transliteration of Hoogewerf, by the way.

Like BC Forbes, it is quite a good idea to get your name on the front of the magazine, and to use it to make a small fortune out of other people's great big fortunes.

China's thirst for luxury is a boom for yacht builders

Sat on a sun-dappled deck of a 60-foot yacht sipping an iced-coffee and smoking a cigarette, Gordon Hui looks pleased with himself.

He has good reason.

Mr Hui, the boss of the Asia operations of UK yacht-builder Sunseeker, is poised to seal a massive deal worth potentially up to 20m pounds ($33m) to sell five yachts - two over a 100 feet (30m) - to a mainland Chinese customer.

"They've done their research. They are just coming to talk delivery times," he says in between meeting prospective customers at the Hong Kong Gold Coast Boat Show.

Mr Hui says the market in China for the deep-hulled, handcrafted luxury yachts that Sunseeker produces in Poole, Dorset has ballooned from "nothing" two years ago.

Since then Sunseeker, which makes 230 boats a year, has sold around 25 yachts to Chinese customers.

Taste for luxury

China's seemingly insatiable appetite for luxury is a boon for yacht-builders, and other makers of luxury goods, at a time when traditional markets in Europe and the US are struggling.


From a distance, Chinese-made yachts look like their European rivals "They get the watch, they get the flashy car and then they get a yacht," says Silva Yim, the Hong Kong-based dealer for Princess Yachts, a UK company based in Plymouth.

But it is not all smooth sailing in China for the predominantly European makers of these rich man's toys.

No-one doubts that China's billionaires have deep enough pockets and a taste for ostentation that a super-yacht amply satisfies.

But high taxes, onerous regulation and a lack of suitable marinas and berths may limit the industry's expansion.

Yacht builders also face emerging competition from local upstarts keen to get a slice of this lucrative market.

Nestled among the Italian and UK-made yachts at the Hong Kong boat show were several Chinese-made vessels.

Karaoke dens

Yacht builders are keen to cater to the different tastes of their Chinese clients.


Samuel Wong is a launching a Chinese brand of super-yachts. Mr Yim, of Princess Yachts which is now owned by LVMH Moet Hennessey Louis Vuitton, says that the Chinese like to use their yachts for relatively short periods at the weekend with the family or to entertain clients.

He adds that open deck areas are smaller as Chinese are not usually devotees of sun-bathing and water sports.

Instead they prefer more inside space to host their guests.

One recent client asked for the master bedroom to be turned into a karaoke parlour, notes Mr Yim.

Not quite Monte Carlo

Despite an 18,000km coastline, extended trips around the Chinese coast are difficult because there are strict rules on where private boats can sail.

Continue reading the main story
“
Start Quote
My boss is flying to Europe next week to inquire about buying a private jet.”
End Quote
Frankie Chan

Chinese luxury rental company
Boat owners require special permits to travel on their yachts from province-to-province and large yachts are treated as commercial ships.

There is also a lack of marinas and the ones that do exist are hardly Monte Carlo standard.

"Once China opens up its coastline, it will become like a new French Riviera," says Albert Wu, general manager of the Gold Coast yacht club.

Demand for yachts is also growing despite a 43% tax on boats imported into China - although many buy and keep their vessels in Hong Kong to avoid paying the duty.

Made in China

From a distance, the 86-feet Accelera looks like the other Italian, US and British made yachts on display at the boat show, with its sleek hull and sharp lines.


Chinese like to use their yachts to entertain guests and business clients But made at a shipyard in Zhuhai, a mainland Chinese city about two hours from Hong Kong, it costs HK$6.8m (£0.5m; $0.9m) - less than a third of the price of its international rivals.

Samuel Wong, executive director of the company that built the boat, says he chose Accelera as the company's brand name because "it sounded Italian".

His father's shipyard used to build fishing and houseboats but Mr Wong believes his new approach will pay off as the existing international super-yacht brands are not yet well established in China.

"The engine and electronics are the same as the international brands - it's our labour costs that are cheap," he says.

Inside the yacht, which boasts a karaoke lounge complete with a disco glitter ball, it smells synthetic and compares poorly to the glossy interiors of its European rivals.

But Mr Wong and the half a dozen other Chinese yacht builders that have sprung up are a tangible example of China's move away from mass production into higher value goods.

Bumper purchase

The buyer of Mr Hui's five Sunseeker yachts, Frankie Chan, is matter-of-fact about their bumper purchase when I contact him by phone.

Mr Chan is the vice president of Oursjia, a members-only luxury rental company based in the southern Chinese city of Guangzhou.

The company looked into to buying the yachts just three months ago in response to demands from some of their 500,000 clients.

They pay a membership fee of 20,000 yuan (£1,900; $3000), which gives them access to rent a car from the company's fleet of 3,000 luxury vehicles and or items from a range of designer furniture.

It estimates that 50,000 of its clients are potential users of the yachts, which come with their own captain and crew provided by Sunseeker.

And, it appears super-yachts are not the only items on their clients' wish lists.

"My boss is flying to Europe next week to inquire about buying a private jet," Mr Chan says.

China's thirst for luxury is a boom for yacht builders

Sat on a sun-dappled deck of a 60-foot yacht sipping an iced-coffee and smoking a cigarette, Gordon Hui looks pleased with himself.

He has good reason.

Mr Hui, the boss of the Asia operations of UK yacht-builder Sunseeker, is poised to seal a massive deal worth potentially up to 20m pounds ($33m) to sell five yachts - two over a 100 feet (30m) - to a mainland Chinese customer.

"They've done their research. They are just coming to talk delivery times," he says in between meeting prospective customers at the Hong Kong Gold Coast Boat Show.

Mr Hui says the market in China for the deep-hulled, handcrafted luxury yachts that Sunseeker produces in Poole, Dorset has ballooned from "nothing" two years ago.

Since then Sunseeker, which makes 230 boats a year, has sold around 25 yachts to Chinese customers.

Taste for luxury

China's seemingly insatiable appetite for luxury is a boon for yacht-builders, and other makers of luxury goods, at a time when traditional markets in Europe and the US are struggling.


From a distance, Chinese-made yachts look like their European rivals "They get the watch, they get the flashy car and then they get a yacht," says Silva Yim, the Hong Kong-based dealer for Princess Yachts, a UK company based in Plymouth.

But it is not all smooth sailing in China for the predominantly European makers of these rich man's toys.

No-one doubts that China's billionaires have deep enough pockets and a taste for ostentation that a super-yacht amply satisfies.

But high taxes, onerous regulation and a lack of suitable marinas and berths may limit the industry's expansion.

Yacht builders also face emerging competition from local upstarts keen to get a slice of this lucrative market.

Nestled among the Italian and UK-made yachts at the Hong Kong boat show were several Chinese-made vessels.

Karaoke dens

Yacht builders are keen to cater to the different tastes of their Chinese clients.


Samuel Wong is a launching a Chinese brand of super-yachts. Mr Yim, of Princess Yachts which is now owned by LVMH Moet Hennessey Louis Vuitton, says that the Chinese like to use their yachts for relatively short periods at the weekend with the family or to entertain clients.

He adds that open deck areas are smaller as Chinese are not usually devotees of sun-bathing and water sports.

Instead they prefer more inside space to host their guests.

One recent client asked for the master bedroom to be turned into a karaoke parlour, notes Mr Yim.

Not quite Monte Carlo

Despite an 18,000km coastline, extended trips around the Chinese coast are difficult because there are strict rules on where private boats can sail.

Continue reading the main story
“
Start Quote
My boss is flying to Europe next week to inquire about buying a private jet.”
End Quote
Frankie Chan

Chinese luxury rental company
Boat owners require special permits to travel on their yachts from province-to-province and large yachts are treated as commercial ships.

There is also a lack of marinas and the ones that do exist are hardly Monte Carlo standard.

"Once China opens up its coastline, it will become like a new French Riviera," says Albert Wu, general manager of the Gold Coast yacht club.

Demand for yachts is also growing despite a 43% tax on boats imported into China - although many buy and keep their vessels in Hong Kong to avoid paying the duty.

Made in China

From a distance, the 86-feet Accelera looks like the other Italian, US and British made yachts on display at the boat show, with its sleek hull and sharp lines.


Chinese like to use their yachts to entertain guests and business clients But made at a shipyard in Zhuhai, a mainland Chinese city about two hours from Hong Kong, it costs HK$6.8m (£0.5m; $0.9m) - less than a third of the price of its international rivals.

Samuel Wong, executive director of the company that built the boat, says he chose Accelera as the company's brand name because "it sounded Italian".

His father's shipyard used to build fishing and houseboats but Mr Wong believes his new approach will pay off as the existing international super-yacht brands are not yet well established in China.

"The engine and electronics are the same as the international brands - it's our labour costs that are cheap," he says.

Inside the yacht, which boasts a karaoke lounge complete with a disco glitter ball, it smells synthetic and compares poorly to the glossy interiors of its European rivals.

But Mr Wong and the half a dozen other Chinese yacht builders that have sprung up are a tangible example of China's move away from mass production into higher value goods.

Bumper purchase

The buyer of Mr Hui's five Sunseeker yachts, Frankie Chan, is matter-of-fact about their bumper purchase when I contact him by phone.

Mr Chan is the vice president of Oursjia, a members-only luxury rental company based in the southern Chinese city of Guangzhou.

The company looked into to buying the yachts just three months ago in response to demands from some of their 500,000 clients.

They pay a membership fee of 20,000 yuan (£1,900; $3000), which gives them access to rent a car from the company's fleet of 3,000 luxury vehicles and or items from a range of designer furniture.

It estimates that 50,000 of its clients are potential users of the yachts, which come with their own captain and crew provided by Sunseeker.

And, it appears super-yachts are not the only items on their clients' wish lists.

"My boss is flying to Europe next week to inquire about buying a private jet," Mr Chan says.

No rules for the rich: How China spends its new wealth

Here's a story an upmarket wine merchant told me about a particularly memorable - and potentially instructive - evening.

A group of Chinese businessmen arranged to meet up one evening for a drink. They were asked to bring their best bottle of wine.

Here was a selection of some of the best-known fine wines in the world. Chateau Lafite 1962, Chateau Latour 1970 - bottles that cost in the region of $1,600 (£1,000) each.

On arrival, the host said: "Gentlemen, show your wines," and the guests presented their bottles for each other's approval.

The host then called: "Gentlemen, uncork your bottle," which they did.

He then indicated a vast silver punchbowl and ordered: "Gentlemen, pour your wine," which they did - into the punchbowl.

The mingled contents of some of the most distinctive clarets in the world were then ladled out between them.

It is a memorable anecdote. But it is also instructive, because it illustrates the way China's new rich approach established luxury goods.

Rich keep spending

As the country sucks up more and more of the world's luxury goods production, producers are growing in their understanding of Chinese tastes.


Would you like a mixer with that, sir? Unlike China's middle class, which is suffering from high inflation, the rich feel no such drag upon their lifestyle.

BMW, which also owns the Rolls-Royce brand, almost quadrupled its first-quarter profits thanks in part to increased demand from China.

It joins a long list of leading luxury brands whose profits have been spurred by demand there.

According to Barclays Capital, the country now buys 12% of the world's luxury goods.

A research report from Barclays says this is set to grow by 20-30% a year. It means in five years' time China could be buying a third of the global luxury goods ouput.

That is a staggering growth rate, but if you look at the increase in the number of millionaires it is not hard to see how it could rise so fast.

There are around half a million Chinese millionaires, 31% more than in 2008, according to the most recent Merrill Lynch Cap Gemini World Wealth Report.

Donald Holdsworth, director of MatchPower in Australia, has been fascinated by China's growing love affair with luxury since the 1990s.

Little emperors

Why does he think the desire for luxury goods has seized the Chinese mind so firmly?

Continue reading the main story
“
Start Quote
In a conformist society where there's no freedom of speech, once a chance appears for you to express yourself without danger you are going to take it”
End Quote
Donald Holdsworth
Kinectic Associates
The answer, he thinks, is rooted in demographics: "The average age of a Chinese millionaire is 39 - that's 15 years younger than in the developed world.

"It happens to coincide with the start of the one-child-per-person policy - the year of the Little Emperors. These children were given the very best by their parents."

So the Little Emperors grew up with as many resources as could be mustered by their parents - at the same time as the economy shifted from communism to capitalism.

That, says Donald Holdsworth, sheds further light on Chinese tastes: "If you've grown up in a conformist society where there's no freedom of speech, once a chance appears for you to express yourself without danger you are going to take it.

"It's like unscrewing the top from a bottle of fizzy water."

That desire is just as well for the largely European producers of luxury goods.

LVMH - Moet Hennessy Louis Vuitton - is the world's biggest luxury brand company with more than 50 of the best-known in its stable.

Overall, LVMH already makes about 40% of its profits from the country.


The taste for all-out show is likely to wane as fortunes - and their owners - mature Others with growing profits in the region include Burberry and German carmaker Audi, whose latest sharp rise in profits were thanks in part to a strong growth in sales of luxury cars in China.

Prada is also exploring other ways of accessing China's wealth. Like other firms it is considering raising money by issuing shares via the Hong Kong stock exchange.

And then there is Gucci, which has pushed hard in China and has some 40 outlets across a string of Chinese cities.

Easy on the ear

The recent growth in the market is pointed up in sharp detail by Berry Bros and Rudd, the upmarket wine merchants.

Wine buying director Alun Griffiths says the Chinese wine market has been growing by 15-20% a year and his firm now does 25% of its business in Hong Kong.

Five years ago that figure was barely 6%.

Chinese tastes are certainly high-end; Bordeaux, which makes some of the most expensive fine wines in the world, is a favourite. But only a few chateaux seem to interest them.

Mr Griffiths says the wine is not necessarily bought for its taste, as the opening paragraph of this piece fully illustrates, but the name is important, too.

"Chateau Lafite sounds well to the Chinese ear, in a way that other Bordeaux wines don't. That may change, but it is the label they are choosing for the moment."

Showing off

Big names are key to wealthy Chinese buyers, in part because the market is new.

Continue reading the main story
“
Start Quote
As a wine lover it's a horror story, but you've got to let people do what they want”
End Quote
Alun Griffiths

Berry Bros and Rudd
Chinese tastes are likely to evolve, as has happened elsewhere.

Donald Holdsworth says if one looks at the UK market of the 1980s, Rolls-Royce cars were the favourite of the rich, giving way to the slightly more restrained Bentley, and these days to the less showy Audis and Mercedes.

"That will probably eventually happen in China, as it has in Japan, where they still love their luxury brands but in a less obvious display of wealth.

"Until then it will be a market that wants to show off."

Meantime, tales of fine wines in a punchbowl - or mixed with 7-Up or Coca-Cola - will doubtless continue to circulate.

But, as Alun Griffiths puts it: "As a wine lover it's a horror story, but you've got to let people do what they want with what they buy.

"After all, there are no rules for being rich."

No rules for the rich: How China spends its new wealth

Here's a story an upmarket wine merchant told me about a particularly memorable - and potentially instructive - evening.

A group of Chinese businessmen arranged to meet up one evening for a drink. They were asked to bring their best bottle of wine.

Here was a selection of some of the best-known fine wines in the world. Chateau Lafite 1962, Chateau Latour 1970 - bottles that cost in the region of $1,600 (£1,000) each.

On arrival, the host said: "Gentlemen, show your wines," and the guests presented their bottles for each other's approval.

The host then called: "Gentlemen, uncork your bottle," which they did.

He then indicated a vast silver punchbowl and ordered: "Gentlemen, pour your wine," which they did - into the punchbowl.

The mingled contents of some of the most distinctive clarets in the world were then ladled out between them.

It is a memorable anecdote. But it is also instructive, because it illustrates the way China's new rich approach established luxury goods.

Rich keep spending

As the country sucks up more and more of the world's luxury goods production, producers are growing in their understanding of Chinese tastes.


Would you like a mixer with that, sir? Unlike China's middle class, which is suffering from high inflation, the rich feel no such drag upon their lifestyle.

BMW, which also owns the Rolls-Royce brand, almost quadrupled its first-quarter profits thanks in part to increased demand from China.

It joins a long list of leading luxury brands whose profits have been spurred by demand there.

According to Barclays Capital, the country now buys 12% of the world's luxury goods.

A research report from Barclays says this is set to grow by 20-30% a year. It means in five years' time China could be buying a third of the global luxury goods ouput.

That is a staggering growth rate, but if you look at the increase in the number of millionaires it is not hard to see how it could rise so fast.

There are around half a million Chinese millionaires, 31% more than in 2008, according to the most recent Merrill Lynch Cap Gemini World Wealth Report.

Donald Holdsworth, director of MatchPower in Australia, has been fascinated by China's growing love affair with luxury since the 1990s.

Little emperors

Why does he think the desire for luxury goods has seized the Chinese mind so firmly?

Continue reading the main story
“
Start Quote
In a conformist society where there's no freedom of speech, once a chance appears for you to express yourself without danger you are going to take it”
End Quote
Donald Holdsworth
Kinectic Associates
The answer, he thinks, is rooted in demographics: "The average age of a Chinese millionaire is 39 - that's 15 years younger than in the developed world.

"It happens to coincide with the start of the one-child-per-person policy - the year of the Little Emperors. These children were given the very best by their parents."

So the Little Emperors grew up with as many resources as could be mustered by their parents - at the same time as the economy shifted from communism to capitalism.

That, says Donald Holdsworth, sheds further light on Chinese tastes: "If you've grown up in a conformist society where there's no freedom of speech, once a chance appears for you to express yourself without danger you are going to take it.

"It's like unscrewing the top from a bottle of fizzy water."

That desire is just as well for the largely European producers of luxury goods.

LVMH - Moet Hennessy Louis Vuitton - is the world's biggest luxury brand company with more than 50 of the best-known in its stable.

Overall, LVMH already makes about 40% of its profits from the country.


The taste for all-out show is likely to wane as fortunes - and their owners - mature Others with growing profits in the region include Burberry and German carmaker Audi, whose latest sharp rise in profits were thanks in part to a strong growth in sales of luxury cars in China.

Prada is also exploring other ways of accessing China's wealth. Like other firms it is considering raising money by issuing shares via the Hong Kong stock exchange.

And then there is Gucci, which has pushed hard in China and has some 40 outlets across a string of Chinese cities.

Easy on the ear

The recent growth in the market is pointed up in sharp detail by Berry Bros and Rudd, the upmarket wine merchants.

Wine buying director Alun Griffiths says the Chinese wine market has been growing by 15-20% a year and his firm now does 25% of its business in Hong Kong.

Five years ago that figure was barely 6%.

Chinese tastes are certainly high-end; Bordeaux, which makes some of the most expensive fine wines in the world, is a favourite. But only a few chateaux seem to interest them.

Mr Griffiths says the wine is not necessarily bought for its taste, as the opening paragraph of this piece fully illustrates, but the name is important, too.

"Chateau Lafite sounds well to the Chinese ear, in a way that other Bordeaux wines don't. That may change, but it is the label they are choosing for the moment."

Showing off

Big names are key to wealthy Chinese buyers, in part because the market is new.

Continue reading the main story
“
Start Quote
As a wine lover it's a horror story, but you've got to let people do what they want”
End Quote
Alun Griffiths

Berry Bros and Rudd
Chinese tastes are likely to evolve, as has happened elsewhere.

Donald Holdsworth says if one looks at the UK market of the 1980s, Rolls-Royce cars were the favourite of the rich, giving way to the slightly more restrained Bentley, and these days to the less showy Audis and Mercedes.

"That will probably eventually happen in China, as it has in Japan, where they still love their luxury brands but in a less obvious display of wealth.

"Until then it will be a market that wants to show off."

Meantime, tales of fine wines in a punchbowl - or mixed with 7-Up or Coca-Cola - will doubtless continue to circulate.

But, as Alun Griffiths puts it: "As a wine lover it's a horror story, but you've got to let people do what they want with what they buy.

"After all, there are no rules for being rich."

Bad Loans Threaten Chinese Banks

Moody's Investor Services, one of the world's top credit rating agencies, says China's banks could be in more trouble than first thought due to bad loans.

Moody's said Tuesday that China's auditor likely underestimated the amount of loans made to local governments by $540 billion.

The additional loans have likely exposed China's loans to increased risk, said Moody's, and that 8 to 12 percent of all the loans made by Chinese banks could go unpaid. Moody's had earlier estimated only 5 to 8 percent of the loans would be classified as "non-performing."

Report author Yvonne Zhang also expressed concerns about the Chinese auditing agency's failure to include the $540 billion of loans in its report last week. She said that may mean many of the newly discovered loans are poorly documented and that the borrowers are at even greater risk of defaulting.

China's banks responded to government calls to increase lending when the global financial crisis struck in order to help boost the economy. Many banks lent vast of amounts of money to local governments for infrastructure projects.

There are concerns defaults on those loans could hurt China's banking sector and then spread to other parts of the economy.

Other top credit rating agencies have warned up to 30 percent of the loans made by Chinese banks could go bad.

Bad Loans Threaten Chinese Banks

Moody's Investor Services, one of the world's top credit rating agencies, says China's banks could be in more trouble than first thought due to bad loans.

Moody's said Tuesday that China's auditor likely underestimated the amount of loans made to local governments by $540 billion.

The additional loans have likely exposed China's loans to increased risk, said Moody's, and that 8 to 12 percent of all the loans made by Chinese banks could go unpaid. Moody's had earlier estimated only 5 to 8 percent of the loans would be classified as "non-performing."

Report author Yvonne Zhang also expressed concerns about the Chinese auditing agency's failure to include the $540 billion of loans in its report last week. She said that may mean many of the newly discovered loans are poorly documented and that the borrowers are at even greater risk of defaulting.

China's banks responded to government calls to increase lending when the global financial crisis struck in order to help boost the economy. Many banks lent vast of amounts of money to local governments for infrastructure projects.

There are concerns defaults on those loans could hurt China's banking sector and then spread to other parts of the economy.

Other top credit rating agencies have warned up to 30 percent of the loans made by Chinese banks could go bad.