China's high tax system led to the outflow of luxury goods

According to the latest data released by the World Luxury Association, during the Spring Festival, the Chinese luxury goods consumption abroad totaled US$7.2 billion, a year-on-year increase of 28.57%, which is much higher than the 5.7 billion US dollars forecast for the previous year, setting a record high. Last year and the Spring Festival of the previous year, Chinese people spent 5.6 billion U.S. dollars and 4.9 billion U.S. dollars in luxury goods abroad.

In the context of the country’s strategy of stimulating domestic demand to revitalize the domestic economy, it is a “bad news” that a New Year’s Day actually used “$7.2 billion” in luxury goods consumption as a “flowing field”. However, the outward shift of 7.2 billion U.S. dollars in luxury goods consumption during the Spring Festival is just a microcosm of the current shift in consumption of luxury goods. The data released by the World Luxury Association in 2011 shows that Chinese consumption in foreign countries is more than four times that of the domestic market, and consumption is seriously shifted.

A Shanghai-based Chinese market research company estimates that Chinese tourists spend a total of 54 billion U.S. dollars overseas in 2010, while overseas tourism in 2011 will continue to grow by 12% to 14%. According to data from eBay.com, the monthly trading volume has increased at a rate of 3 to 5 times since the website was opened for self-employment. Some scholars predict that by 2012, the scale of overseas purchasing transactions will reach 48 billion yuan.

Under the condition of a market economy with feet and a high degree of freedom, where to buy goods and consumption, choose what time to spend, and buy something are all consumers' freedom. No regulatory authority has the right to interfere. Therefore, it cannot be attributed to consumers that luxury goods are being shifted, and it is believed that they are not patriotic. So where is the problem?

The World Luxury Goods Association's survey of Chinese outbound spending groups during the Spring Festival shows that 72% of people think that the price of going abroad to buy luxury goods has an advantage over the domestic market; 69% believe that there are more foreign purchases of luxury goods than domestic ones. There is plenty of room for selection; 45% of people go abroad to buy luxury goods in order to enjoy real origin goods and local services.

It can be seen that one of the important reasons for the shift in consumption of luxury goods is that foreign consumer goods are cheaper than domestic consumer goods; followed by ample supply, there is plenty of room for choice. In addition, the quality is better, there are signs of origin, consumers feel at ease. It can be seen that buying luxury goods abroad is in line with the laws of the market economy. Therefore, to change the current consumption situation of luxury goods consumption and to leave tens of billions of dollars in consumption a year in the country, we must start by reducing domestic consumer prices of luxury goods, creating a better investment environment and business environment, especially in reducing In terms of luxury prices, something should be done.

In terms of consumer product prices, we must say what the current tax system is. According to reports in the China Youth Daily: A Swiss-imported watch that sells for 2,700 yuan in the mainland will contain 17% of VAT 392 yuan, 30% of consumption tax 623 yuan, and 11% of tariff 267 yuan. Chinese scholars found that the price of Chinese exports to the United States was 50% cheaper than similar domestic goods. Scholars believe that China’s VAT, consumption tax, and business tax, and other turnover taxes, have resulted in high commodity prices. China’s commodities have higher taxes than any other developed country: 4.17 times that of the United States and 3.76 times that of Japan. 2.33 times that of the country. Therefore, reducing the tax cost in consumer goods is an option to reduce the price of consumer goods.

At the same time, market supervision should also be strengthened to prevent counterfeit and shoddy products from flooding the market with consumers, and it is also an important aspect of attracting luxury goods consumption. The “Da Vinci Furniture” incident last year shows that there are still problems in the supervision of the luxury consumer market. Many people are skeptical about the quality and origin of products, and therefore go abroad for consumption.

A year's luxury goods outflow of more than 500 billion US dollars, a Spring Festival of 7.2 billion US dollars, for the stimulation of domestic demand, is not a small amount. It should take a coping style and change the status quo.