After Musk, Arnott plans to visit China this month.

On May 30, Tesla CEO Musk visited China again after three years. The total trip of about 44 hours was quite compact, and I met with three Chinese ministers.

For such an important itinerary, the capital markets will certainly react. On the first day of Musk's visit to China, Tesla's stock price soared 5%, and by the end 

of the day, it was up more than 4%, and its market value rose by more than $25 billion.

Thanks to Tesla's soaring stock price, Musk regained the title of the world's richest man after half a year. The Bloomberg Billionaires Index shows that Musk's

 net worth at the time was about $192.3 billion, surpassing the $187 billion of Bernard Arnault, chairman of the LVMH group.

Just two or three months ago, Arnott was the richest man in the world. Whether it is the "2023 Hurun Global Rich List" released on March 23, or the "Forbes"

 2023 Global Billionaires List released on April 4, he is the richest person in the world.

Can a trip to China change the ranking of the world's richest man? Arnott plans to visit China this month, Bloomberg reported on June 1. This will be Arnott's

 first visit to China since the epidemic.

1

Comparing these two richest people in the world, it is like two sides of the same coin-

Musk is a representative of new technology, Tesla through technology-driven, the implementation of mass production to reduce costs, strive for the support of

 the broadest number of consumers, so as to obtain huge wealth;

Arnott is a typical example of new consumption, LV and others through cultural empowerment, achieve small batch production to increase the price, only to p

lease a small number of rich people, thus reaching the peak of wealth.

Looking back at the world's richest man industry in the past 20 years, Musk and Arnott are a watershed.

Before Musk, the world's richest man was basically dominated by the following 4 big names: Microsoft's Bill Gates, Mexico's telecom tycoon Carlos Slim Elu,

 Zara's clothing brand founder Amancio Ortega, and Amazon's Bezos.

Their main source of wealth is to provide global consumers with national economy and people's livelihood-level products and services. They are all in stark co

ntrast to Arnott. The latter only provides products and services to a relatively small number of wealthy classes - LVMH has nearly 80 brands such as LV, Dior, 

Bulgari, Fendi, Celine, Givenchy, Chaumet, Hublot, Zenith, Guerlain, Sephora, Moet & Chandon, Hennessy, etc., and is the only company in the world coveri

ng wine and spirits, fashion and leather goods. A group in five main sectors: perfumes and cosmetics, watches and jewellery and high-end boutique retail.

Luxury goods don't need to compete with tech companies' growth models, because innovation in this industry is not the same as Tesla's disruption of the auto 

industry. Perhaps even Musk can't be sure whether the next generation of new energy vehicles is an evolved version of the Model 3, but Arnault can be sure th

at the travel hard case made since 1854 must still be the DNA of the next century LV.

To further make an interesting thought: Why is there no Arnault in the United States? And France without Musk?

Both are phenomenal business geniuses. Musk relies on his wild imagination and disruptive scientific and technological innovation to bring mankind into a ne

w era; Arnott unleashes creative talent and craftsmanship through the integration of capital as king, pushing consumption to a new climax.

These two richest people in the world, one of whom has swept the market with hardcore technology, just like the scientific and technological nature of the Uni

ted States; The other leads the world by artistic etiquette, just like the cultural heritage of France.

More interesting questions are, why is almost all of their biggest sales market China?

2

How important is the Chinese market to the two richest people in the world?

Let's take a look at Musk first. From the performance point of view, the Chinese market is Tesla's second largest market in the world.

According to the fiscal year 2022 annual report, Tesla's total revenue was $81.462 billion, a year-on-year increase of 51%. Among them, the Chinese market a

chieved revenue of 18.145 billion US dollars, a year-on-year increase of 31.07%, accounting for 22.27%.

In terms of sales volume, Tesla's Shanghai Gigafactory delivered 710,000 vehicles in 2022, more than half of Tesla's global deliveries.

According to data from the Passenger Association, Tesla's total sales in China in the first quarter of this year were 229,300 vehicles, a year-on-year increase of

 21%. Based on this calculation, the Shanghai Gigafactory still contributes more than half of the world's production capacity.

Let's look at Arnott. According to the 2022 financial report, under the adverse impact of the geopolitical and economic situation, LVMH Group still achieved a

 record high, with sales revenue of 79.2 billion euros and operating profit of 21.1 billion euros, both up 23%.

Although Chinese mainland business has been affected, Asia remains LVMH's largest market, accounting for 37% of total sales.

In this report card, LVMH's more anxiety comes from the Chinese market. Jean Jacques Guiony, chief financial officer of LVMH, said: "We did not fully expe

ct a significant decline in revenue in China last December. He attributed it to "weak consumption" in the Chinese market.

However, Arnault is optimistic that the optimization and adjustment of China's epidemic prevention and control policies in 2023 has brought a strong start to L

VMH, and he is full of confidence in the Chinese market.

Barclays' report predicts that China's luxury goods sector is likely to recover faster than expected, recording 15% growth in 2023, outpacing the 9% growth of 

the global luxury market and outpacing the 7% and 6% growth in the US and Europe. The trend shows that Chinese consumers are not less eager to buy luxury

 goods, and this trend is expected to further improve in the second half of 2023.

Before 2022, China was the world's largest luxury consumer market, accounting for almost half of global luxury spending. According to Bain & Company, Chi

na's luxury market fell by 10% year-on-year in 2022. However, this decline is only temporary, and it is expected that China's luxury market will return to the le

vel of 2021 this year.

The Chinese market is quite important. The war between the two richest men in the world in China has begun, and each is forging ahead on their respective tra

cks.

3

Is the Chinese market just an economic account for them?

When meeting with Musk, State Councilor and Foreign Minister Qin Gang said that China's development is an opportunity for the world. A healthy, stable and

 constructive China-US relationship is beneficial to both China and the United States and the world. China will continue to unswervingly promote high-level o

pening-up and strive to create a better market-oriented, rule-of-law and international business environment for enterprises from all over the world, including Te

sla.

Musk used a vivid metaphor: the interests of the United States and China are intertwined, like conjoined babies who are inseparable from each other. He also e

xpressed a clear attitude: Tesla opposes decoupling and breaking the chain, and is willing to continue to expand its business in China and share China's develo

pment opportunities.

As a benchmark entrepreneur in the United States, Musk's coming to China at this time is of great significance. Industry speculation that the main reason for 

Musk's visit to China this time is to promote the expansion plan of the new Model 3 and Shanghai Gigafactory mass-produced in the Shanghai factory, as well

 as the upcoming Tesla Shanghai Energy Storage Gigafactory. In addition, Musk may also hope to accelerate the implementation of FSD (fully autonomous dr

iving) technology and energy storage products in China.

The world's richest man from the United States is pushing China's hardcore technology to a new level.

Arnott, who has not visited China in the three years of the epidemic, is also directing "from the air" and increasing investment in the Chinese market.

As a consumer category that has rarely been greatly affected after the epidemic, luxury goods obviously have important significance in driving the recovery of

 China's consumption. On April 21, Minister of Commerce Wang Wentao met with Arnault and Hermès CEO Axel Dumas in Paris, France, to promote the 6th 

China International Import Expo in November this year. Arnault said on the spot that LVMH would actively participate.

The stability of VIC customers and the return of overseas consumption have allowed luxury brands to accelerate the layout of the Chinese market. At the Janu

ary earnings conference, Arnault said that Chinese tourists will not return significantly until at least the second half of this year, and that 90% of China's luxur

y consumption demand is still domestic, and it will take some time for the share of overseas consumption to expand.

In order to meet most of the consumption that still stays in China, and to combat daigou that "may destroy a brand", the best way is to enter the duty-free mar

ket in China.

Hainan has thus won the favor of LVMH. In early April, LV's double-storey store in MixC in Haikou was officially fenced; At the same time, LV officially an

nounced that Dior Boutique released recruitment information, and both Sanya boutiques will land in the second phase of CDF Sanya International Duty Free 

City.

This also echoes the attitude of LVMH CFO Jean-Jacques Guiony at the April earnings conference: there is little interest in the current tax exemption model f

or outlying islands, and more interest in the customs tax exemption for the entire island of Hainan. The world's richest man from France is stepping into the m

arket to push China's consumption upgrade to a new level.

Technology-driven, or consumption-driven? Musk is important to a country's economic development, and Arnott is also essential.

As the turbulent 2022 drew to a close, the Central Economic Work Conference officially finalized the roadmap for "stabilizing the economy" in 2023 - which 

will "focus on expanding domestic demand", in which "the recovery and expansion of consumption should be given priority". The Outline of the Strategic Pla

n for Expanding Domestic Demand (2022~2035) proposes to continue to increase traditional consumption and better meet the consumption demand of mid-to-

high-end consumer goods.

High-end consumption represented by European and American luxury goods is staging a "two-way rush" with Chinese consumers, and Arnault has more reaso

n to continue to be proud of the global wealth list; And Musk, who has already set his sights on Mars, how can the beauty of the sea of stars be measured by m

oney?