Junheng Li: We did a survey about two years ago when they just launched an anti-corruption campaign. Everyone thought it was going to be short lived but it's not. It's been two years now and it's still deepening and reaching all sectors in the economy. Originally we thought it was going to be just a purge in the military, in the government. Now it seems like it affects pretty corporations in all sectors and in exchange groups as well. We look at Swiss watches because those stocks have been driven primarily by its growth in China, you know, the owner of Omega, the owner of Rolex. However, after the survey we realized that 60 percent and above of the purchases were driven by gifting. So not only due to purchases by men to their mistresses, but also purchases by business people for their business contacts, business partners, and government officials.
To a degree Macau Casino has an element of that as well, especially in the VIP rooms. So what's good about this anti-corruption is, I think, the current leadership, by doing so they are really restoring some confidence domestically. They make people realize that inappropriate behaviors in the government, abuse by government officials and in the business world is no longer acceptable. So part of the gifting economy is moving underground and part of it is just being starved away. And going forward I think we will see more contraction in luxury sales, not only just bags and Swiss watches but also we'll continue to see that in Macau VIP rooms, luxury autos, luxury banquets, luxury outings. So that would, to a degree, affect five-star hotels in China, expensive restaurants in China as well. So if you go to any sort of conferences right now, I mean that's a really heated topic, everyone's trying to gauge the magnitude of this campaign and how long it's going to last.
I just got back from Beijing from a trip. I took a group of investors in the U.S. to meet with the policymakers and policy advisers to the leaders of Beijing. And the takeaway is it's not as superficial as people think. It's going to be there for a while and it seems like the current leaders are very committed to purge corruptions and corrupted behaviors.