Guo Jiale and Wang Zhushi pose on the deck of the Princess yacht on April 16. Photo: CFP

By Li Xiaoshu

Getting married on a 63-foot British Princess yacht worth 20 million yuan ($3.1 million) might once have seemed unrealistic for 25-year-old groom Guo Jiale and his bride Wang Zhushi, both office employees in Shanghai.

But now they are celebrating their nuptials while snuggling cozily on a U-shaped sofa, looking through a large wrap-around window at exhilarating scenes along the city's Huangpu River.

It's all thanks to a Shanghai official program of providing free yacht weddings, a plan starting from this year to cultivate public awareness of the country's expanding yacht market, as part of a national campaign to boost the nascent industry. 

One of the five selected couples to join the government-sponsored activity, the Guos find that yachting is pretty different from other boating experiences such as the exhausting rides on local ferryboats where they elbowed their way through the crowd, or the quiet and slow cruise down the River Thames in London when they studied there.

"It was sweet and private," recalled Wang, a 26-year-old public relations officer. "We would like to do it again. The only problem is the cost."
Rich man's toy?

Rich man's toy? 

In the West, boating is a fairly common pursuit, but in China it is more exclusive. Roughly 90 percent of yacht buyers are companies and members of China's super-rich elite, according to Wang Yixin, a researcher at Zhoushan-based Zhejiang Ocean University.

Zhang Xiangli, president of Beijing Huaxia Shuangda Equity Investment and Fund Management Company, traveled to Sanya in Hainan, touted as China's playground for the rich, to spend 20 million yuan on a Ferretti 660 yacht. He expects to use it less than 10 times a year.

"The money is enough to buy 15 Mercedes-Benz or BMW sedans, but I can treat my business partners better on a yacht," Zhang says.

The 2011 Hurun Wealth Report said that among the 96,000 people in China who have personal wealth of more than 10 million yuan, around 50 percent intend to buy luxury boats. This equates to potential sales of 200 billion yuan ($30.6 billion).

China's total yacht exports were worth $204 million in 2010 and the market will keep a steady annual growth of 30 percent over the next five years, predicts Yang Xinfa, president of the Boat and Yacht Commission under the China Association of the National Shipbuilding Industry.

He was talking at the 2011 Shanghai Boat Show, which closed on Sunday, with 1 billion yuan worth of yachts sold at the show. 

Insiders said the yacht industry has only been successful in regions with GDP per capita of more than $3,000. The GDP in several coastal provinces, such as Guangdong, Jiangsu and Shandong, is already nearly double that figure.

US-based yacht maker Brunswick Corp, which started a business in China in 1998, regards the market as the world's third largest, after North America and Europe. The company also forecasts growth in the domestic market of 25 percent in 2011. "China's stunning growth in high-end consumer spending gives us great confidence," said Brunswick CEO Dustan E. McCoy.

Luxury yacht producer Ferretti Group predicts a double-digit revenue increase this year. The Chinese mainland market accounted for 8 percent of its global sales in 2010.

"One of our strengths here is to install localized facilities tailored for domestic consumers, such as karaoke equipment and mahjong tables," said Cheng Gang, chief representative of Ferretti's Shanghai office. He admitted that most Chinese don't yet see yachts as a way to spend their extra money.

"Rich Chinese people prefer a Rolls Royce, a new house, or maybe a new collection of LV bags," he said.

You can afford it too

Some are concerned about yachting being viewed just as a hobby for the super-rich. "The perception of yachts has been distorted," complained Zhou Jifu, CEO of Dalian-based Blue Whale Yacht company.

"People tend to see them merely as a symbol of personal wealth, or a tool for social networking, instead of part of a healthy and active lifestyle," he said.
 

Zhou spent 10 months designing and producing China's first 60-foot yacht, which cost 60 percent less than a similar imported model. 

So why are yachts viewed mainly as status symbols in China? "The marketing strategy fits a collective consumer psychology to boast of personal wealth," said Chen Xiuping, director of the Shanghai Maritime Administration.

"Companies should launch incentives such as yacht partnership programs, yacht tourism and yacht renting, to boost the lower-tier segment," he said.

China Minsheng Banking Corp and Shanghai's top yacht manufacturer, Double Happiness Yacht Co, signed on April 15 China's first financial cooperation framework to support Chinese yacht buyers with bank loans of up to 70 percent, but mortgage details have not been released yet.

The authorities also hope to whet the yachting appetite of the burgeoning middle class, not just the ultra rich. The National Tourism Administration plans to promote yachting as part of its plans for water tourism over the next five years.

Policy problems

French yacht company Beneteau has considered an expansion plan in China, but is still uncertain. "There is a long way to go," said the company's China manager, Francois Rodrigues, noting that the 43 percent import duty remains an obstacle.

This is one reason why China has 1,300 registered yachts, too few to generate public activities along its 18,000-kilometer coastline.

The government also requires yacht buyers to submit detailed design drawings of their boats, which makes manufacturers nervous.

It also creates "a bottleneck," said Zhang Jie, deputy director of the Hainan Maritime Safety Administration. Furthermore, "China lacks top-notch marinas and public ports," he added.

There are also strict rules over where private boats can sail in China.

The country currently has no licensing scheme for pleasure boaters, and large yachts must be registered as commercial ships, says Zhao Chenyang, CEO of Hangzhou-based joint venture Sino Eagle & Leopard Yacht Co.

Boat owners can only get licenses to sail within the waters of one province. There is no license allowing for lengthier cruises around China's coast, he said.

However, "If the government opens the market, the swans on water will become wolves to take over the market," he added, optimistically.

Source: China Association of the National Shipbuilding Industry