A demanding middle class leads the way in China

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Andrew Wu, showed up exactly on time for our interview, looking fashionable and unflappable.

It is exactly what one would expect from the Greater China President of LVMH – the parent company of such titans of industry as Louis Vuitton and Fendi.

Wu had an improbable journey to the top that would have been impossible without China initiating its open-door policy 40 years ago.

Luxury goods are displayed at a shopping mall. /CGTN Photo

He left China in 1980, only, as he said, to be one of the first to return in 1993 when China's consumer industry was arguably still in its infancy.

How times have changed.

“Today,” Wu said, “I would say nobody would argue that Chinese students going overseas when they land in Paris, Milan, Tokyo, or New York you cannot tell they are from China anymore.”

Wu means it in a most complimentary way.

A booming middle class

China has a booming middle class, and what distinguishes it from every other nation, is that the middle class is young, chiefly people in their 20s, 30s and early 40s.

And armed with an impressive disposable income, this growing sector has its sights set on quality items.

Wu grew up in Shanghai and takes pride in the city's international flair.

Today, economists say that about one-fourth of Shanghai's GDP comes from what is known as FDI, or foreign direct investment.

Do all Chinese want expensive brands?

At a high-end shopping mall, not far from the Bund, we meet 26-year-old Zhang Yuanyuan.

Zhang, a schoolteacher, is spending time checking out various shades of lipstick before making a purchase.

Customers select goods at a shopping mall. /CGTN Photo

Do all Chinese want the most expensive well-known brands? “The situation varies,” she said as her friend documents our TV interview on her phone. “It depends on the salary. If you are wealthy you will choose the international brands, but if you are paid less, maybe you will choose the local or Chinese brand.”

Wu likes to say that China's middle class has become “sophisticated.” And, those spenders are “internationally localized.”

He said the consumer revolution in China got a big jump-start when the nation joined the World Trade Organization back in 2001.

Andrew Wu is being interviewed by CGTN. /CGTN Photo

And, while people often think of international investment as linked to infrastructure and fixed assets, this retail boom is offering something new and different.

Wu also said it means hiring more people, opening more stores, and providing more rent and advertising dollars in the community.

It is also engaging with Chinese consumers, and allowing international companies to learn from China.

We caught up with Andrew Wu at a Louis Vuitton exhibition in Shanghai that he said is drawing record crowds.

LVMH has a brand called Cha Ling, which is described as an international brand geared toward China.

As China's open-door policy continues to evolve, Wu expects to see more branding for China.