the increasing popularity of china stamps
TRANSCRIPT
Copyright © Richard Tang
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The Increasing Popularity of China Stamps
Many years back, stamp collecting was an extra-curricular activity of school
kids around the world. Modern technology was thought to have killed this
hobby due to the decrease in the usage and demand of postage stamps.
Out of surprise, this turned out to be untrue. Stamp collecting is not an
obsolete hobby; and it is not really on the verge of dying out.
Statistics have shown that there are about 60 million stamp collectors around
the world, one third of which come from China.
(Source: Stanley Gibbons, Barclays, ASDA)
Let’s take a look at the key factors that drive the popularity of China stamps
in the modern philately landscape.
1. The Role of China Economy
Based on the annual assessment by Forbes magazine, China has over 210
USD billionaires in 2015, only second to the United States in terms of ranking.
Besides, there are many billionaires and millionaires who are Chinese
descendants living in the North America, Singapore, Malaysia, Australia and
European countries.
Like so much of the global economy these days, the center of the world's
multi-billion-dollar stamp collecting market is shifting east.
Stamp collecting was banned under Mao’s regime until 1976. In 2000, the
China government made it an official policy to foster stamp collecting
among youngsters. Wealthy Chinese are now beginning to buy back their
heritage on a massive scale. Young Chinese investors are laughing their way
to the bank with significant gains on their China stamp portfolio. Out of
nowhere, Asian stamp collectors are turning a dying hobby into a high-end
investment! Auction houses are sprouting up in Hong Kong, Singapore
Shanghai and Beijing, driving many wealthy Chinese collectors jumping on
the bandwagon.
Copyright © Richard Tang
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In December 2015, the International Monetary Fund has approved the
Chinese Yuan (CNY) into its elite reserve currency. With this policy, from
October 2016 onwards, the CNY will join the USD, EUR, JPY and GBP in the list
of currencies that IMF uses as an international reserve asset. This will definitely
affect the purchasing power of the Chinese people, which in turns could
affect the landscape of Chinese antiques and collectibles markets.
2. The Growth of Global Chinese Population
Mainland Chinese
(Source: United Nations)
The sheer size of the Chinese population explains its large representation in
the international philatelic community. With increasingly higher purchasing
power and greater appetite for stamps, they are the key driver of this
lucrative Oriental collectibles market.
The number of stamp collectors in China is still growing rapidly. Keith Heddle,
Managing Director of Stanley Gibbons once said: "The Chinese are collecting
in their millions. In China there is no stigma about collecting stamps – they
want to reclaim their history.” He added that this pool of 20 million collectors
contribute $9 billion annually to the global stamp market.
In addition, China officially announced the end of its one child policy in
October 2015, in an attempt to cope with its ageing population, imbalanced
gender ratio and shrinking workforce. The change takes effect from January
2016, in which married couples are allowed to have a second child. The
number of collectors is expected might increase even faster at least in the
next 50 years, if China government sustains their current effort to promote
stamp collecting.
Overseas Chinese
Copyright © Richard Tang
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There are over 50 million overseas Chinese in the world. Most of them live in
Southeast Asia. A few millions live in the US, Canada, Australia and Europe.
According to research papers by David Bartlett (1997) and Kazuo Fukuda
(1998), overseas Chinese were estimated to control $1.5-2 trillion in liquid
assets and have considerable amounts of wealth to stimulate economic
power in China. This statistics is almost 20 years old and the number is in
trillions!
This group also contributes significantly to the sales of China stamps all over
the world. It’s normal to see them spending five figures in auction.
According to my observation over the last 5 years, many of those who place
bids for China stamps on eBay are overseas Chinese (by name*). They usually
bid aggressively and sometimes drive the hammer price to an unimaginable
figure!
* Nowadays, by looking at Chinese surname, you would probably know
whether they are Mainland or overseas Chinese.
3. Non-Chinese Collectors Shifting to China Stamps
I once received an email from an American stamp collector with over 50
years of experience. He shared about his great interest in China stamps and
how his fellow American collectors were shifting their attention to this area.
The figures of non-Chinese collectors are currently estimated based on
membership of philatelic associations. Yet, there are many closet collectors
who belong to no formal associations and are philateling in the privacy of
their own homes. We could come across many of them in online forums and
philatelic exhibitions. Many of them claim China stamps to be among their
top focus. With the increasing popularity of China stamps, non-Chinese
collectors globally will definitely jump on the bandwagon and claim their
share in this lucrative area.
Nick Salter of Philatelic Investors shared that the Chinese appear to be buying
as collectors, whereas Westerners are more likely to be buying for investment,
in the anticipation that they can sell on into the Chinese market at a later
date.
*
* *
Copyright © Richard Tang
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Stability and Sustainability
The hard truth is that China stamp market is still highly volatile. Prices spike
and fall on a regular basis due to the presence of thousands of big dealers
who hold very large stocks and have the power to manipulate the price.
However, the value of China stamps is still on the rise in the medium to long
term.
Dealers in Singapore can price China stamps at three times higher than the
catalogue value; and collectors are still willing to pay the price. The used set
of S38 Goldfish issues of 1960, for example, has an average catalogue value
of $100. Yet some shops in Singapore are now selling it at S$350
(approximately $250). On a side note, sellers on Carousell (a Singapore-
based marketplace mobile app) have never priced this set below S$150, at
least at the time of this writing.
According to Mr. Tan Chun Lim, an expert in China stamp, the owner of CS
Philatelic stamp shop in Singapore, and the editor of the Singapore version of
China stamp catalogue, catalogue value can only be used as a reference.
Buyers may pay much higher, depending on the demand. On the other
hand, if you’re lucky enough, you may grasp decent quality stamps at much
lower price.
China Stamp Index
(Source: Stanley Gibbons)
Another interesting aspect to look at is the Stanley Gibbons China stamp
index, which track the performance of 200 pieces of rare investment-grade
China stamps since 1989.
Growth has been substantial, with cumulative growth of 1,170% over the last
25 years, and compound annual growth of 10.7%
Copyright © Richard Tang
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Besides, collectors can also refer to the CN100 index, provided by the China
Stamp Index Company Limited. The company was founded in 2011 by Mr.
Ricky Tam – the Chairman of the Hong Kong Institute of Investors and Director
of the World Federation of Investors Corporation, and Dr. Sam Chiu – the CEO
of David Feldman Asia. Statistics also shows the steep uptrend. However, the
index hasn’t been updated since 2012.
Generally speaking, China stamp is an extraordinarily hot trend. If you have
been collecting for years, congratulations! You might have started or will be
gaining upon liquidation of your collection. If you would like to start venturing
in this area but yet to do so, don’t wait until the market goes wilder!
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