China’s Super Rich Aren’t Buying Yachts Because They Don’t Want to Look Corrupt

December 27, 2016, 6:14 AM UTC
China Rendez-Vous show opens in luxury spree
View of the living room of the superyarcht Lohengrin, on display during a luxury lifestyle exhibition in Sanya, Hainan, China, on Mar. 27 2014.
Jack Jack—Imaginechina

How do you measure a country’s economic health? There are the usual indicators, like GDP or median income. And then there are the more flamboyant gauges. Like yachts.

If you go by sales of luxury marine craft, China’s economic slowdown, and the dampening effects of a high-profile anti-corruption campaign, have well and truly set in, the South China Morning Post reports.

Sunny Tao, a sales director with Simpson Marine Ltd, one of China’s biggest yacht brokers, told the Post that there are presently “about 3,000 to 4,000 registered yachts across the mainland, about half imported from overseas.” That’s pretty much the same market size as three years ago, when there were 3,700 yachts measuring 8 meters or more registered in the country.

The numbers fall far short of projections — wildly optimistic in hindsight — that the Chinese yacht market would hit $10 billion by 2020.

So why have sales flatlined?

For more on the super rich, watch Fortune’s video:

For Tao, who has sold over 100 yachts to Chinese buyers over the past ten years, it’s all about the optics. Yachting in Europe and the U.S. is seen as affordable for the merely well-to-do, but in China, Tao says, it is the exclusive preserve of the ultra-rich. At a time when Beijing is cracking down on corruption—and in the middle of China’s widening wealth gap—buyers are worried about what kind of statement the flashy purchase of a yacht might make.

Another reason is a lack of confidence. “The upper-middle class would only buy yachts when the economy is seeing stable growth and people are making a good living—not like now,” Tao told the Post. “Many rich Chinese people are worried that they will have less wealth in future and are thinking of migrating overseas.”