LVMH CEO Bernard Arnault to visit Beijing

Following in the footsteps of Jamie Dimon, CEO of JPMorgan Chase, and billionaire Elon Musk, Bernard Arnault is now planning a visit to Beijing, according to Reuters sources. While the group remains discreet about the official reasons for the visit scheduled for this month of June, it can be seen as a desire to create new opportunities and agreements with local business partners. Market stability is also a key focus.

The presence of the French luxury giant in Asia is crucial. In the first quarter of 2023, LVMH reported a 14% increase in revenue compared to the same period in 2022. Jean-Jacques Guiony, the company's CFO, interprets these figures as an explicit confirmation of the Chinese market's recovery after abandoning the "zero-Covid" strategy. The group of Bernard Arnault has already announced its participation in the "China International Import Expo" to be held in Shanghai in November. This economic event, created in 2018 and bringing together over 2'800 exhibitors from 145 countries, is described by President Xi Jinping as "an important decision made by China to pursue a new cycle of high-level opening up, and it represents China's major initiative further to expand market access to the rest of the world."

After a decline in sales in 2022, European brands are betting on a new rebound, driven in particular by domestic demand, as affluent Chinese consumers remain cautious about traveling abroad. The Bernstein firm predicts a sales increase of high-end products ranging from +25% to +35% for 2023, fueling the ambitions of industry players.

In April, Wang Wentao, Chinese Minister of Commerce, met with Bernard Arnault in Paris, signaling LVMH's intentions to strengthen ties with Chinese leaders and further conquer this market. The necessity to directly interact with Chinese leaders to obtain more significant guarantees for business development in the country is also motivated by the challenges the country faces in achieving stable industrial and artisanal activity. Official data shows that Chinese manufacturing activity remained weak throughout the month of May.

On May 31st, the National Bureau of Statistics Service Sector Survey Center and the China Federation of Logistics and Purchasing released data indicating that the Purchasing Managers' Index (PMI) for the Chinese manufacturing sector in May was 48.8%, a decrease of 0.4 percentage points from the previous month. The production and new orders indexes were 49.6% and 48.3%, respectively, representing a decrease of 0.6 and 0.5 percentage points from the previous month.

These uncertainties have recently negatively influenced European stock markets, particularly luxury companies. The existing geopolitical tensions between China and the United States regarding Taiwan also contribute to market instability.