There has been an abundance of analyzes and assessments about China and the opportunities for investors in Asia over the past two years.

Some urge caution, the other camp still sees huge potential in the country.

Most recently, however, the debt crisis of the second largest Chinese real estate developer Evergrande shook the financial markets, and the “Chinese Lehman” has already been conjured up by some.

It doesn't seem to look like it at the moment.

Nevertheless, according to Carsten Mumm, chief economist at the private bank Donner & Reuschel, China “remains a politically difficult to predict environment for international investors.” On the one hand, long-term plans such as the development of the New Silk Road or the targeted promotion of particularly promising technologies (made in China 2025), on the other hand, "there is always the possibility that there may be an abrupt change of political course, for example if the top priority of the Chinese government, social peace, is in danger," said Mumm. The private bank's chief economist is not the only one who is skeptical about China.

Also and especially Europe's luxury goods industry the question arises of how things will go from here.

Because China has been the promised land for the global luxury goods industry for many years.

Thanks to the economic upturn, private consumption is also booming.

Accordingly, status symbols such as handbags, jewelry or fashion items are also in great demand.

In addition, China was able to shake off the consequences of the first corona wave particularly quickly and also help the luxury goods industry to recover quickly.

Recently disappointing economic data

According to the latest economic data, China is running out of steam economically and the Beijing government now seems to be watching the private sector more closely than in the past. Under President Xi Jinping, communist ideas are now being brought back into focus. In addition, the issue of data protection plays an important role for the government, while the fight against escalating debt in the private and corporate sectors is also advanced. As a result, educational companies, for example, should no longer generate any profits. Tencent has been hit hard by restricting the amount of time children can play video games online. Other tech companies like Alibaba are also facing a completely new headwind. It is feared,that other industries could also be scrutinized more closely from the regulatory side. In addition, the Chinese government tries to intervene with every corona outbreak, no matter how small. The impact this is having on the economy was evident in the August retail data. Retail sales increased by just 2.5 percent year-on-year, after growing at 8.5 percent in July.

Concerns about China are one of the reasons why stocks in luxury goods companies like LVMH Moët Hennessy Louis Vuitton recently had to interrupt their recovery rally.

The group had earned a lot of money with China in recent years, making LVMH boss Bernard Arnault not only the richest European, but also the richest person in the world at times.

Strong LVMH half-year results

The share price of the global leader in the luxury goods industry saw a steep rise.

In the wake of the corona stock market crash, the LVMH price collapsed by more than 35 percent to 279 euros between January and March 2020, but immediately afterwards it skyrocketed.

The price had increased two and a half times by the middle of this year and hit a new record high of 715.80 euros in August.

The whole thing was also fueled by impressive business results. LVMH reported a year-on-year increase in sales of 56 percent to EUR 28.7 billion for the first half of 2021 alone. Organically, the increase was 53 percent. In addition, the pre-crisis level was exceeded. Compared to 2019, sales increased organically by 11 percent. In addition, the growth rate in the June quarter was increased compared to the first quarter of 2021.

The expected recovery in travel and tourism activities (so far) holds further potential for the LVMH success story - in the past, holidaymakers in particular have shown themselves to be very willing to spend.

In addition, LVMH wants to continue to benefit from the growth potential in the Asia-Pacific region, especially China, in the future.

There is no doubt about that on the part of the corporate management.

In the past, aspects such as the intensified fight against corruption had already led to setbacks in revenues in the luxury goods industry.

However, these phases did not last.

Constant long-term upward trend


In addition, with the takeover of the US precious jeweler Tiffany, LVMH has ensured even more diversification in its group portfolio.

In view of the 75 brands and more than 5,000 stores worldwide, this is already very high in the case of LVMH, especially since the diversification is now to be further strengthened with the new online sales channel.

If you leave out the topic of China completely, LVMH seems to be a stock that should be considered a “must have” in fashion language in the depot.

The share is currently again trading well above the 200-day line and has been trading in an overarching upward trend since the beginning of 2009.

Since then, the price has increased by an average of 24 percent per year.

LVMH should also be of interest to conservative investors, as the shares have only seen relatively short-term and moderate setbacks in the past.