The “Inconvenient” luxury of endangered wildlife in Asia

Lobbyists advocating to legitimise rhino horn trade generally do not examine the use of rhino horn in Asia in terms of it being a luxury goods product. With a record 1004 rhinos killed in South Africa in 2013, rhino horn sells for as much as $80 000/kg on the black market, double the price of gold.

The growth of the Chinese economy over the last 30 years has culminated in a powerhouse of 1.4 billion people that will overtake the USA as the world’s strongest economy within 10 years. China has already overtaken Japan as the second largest consumer country of luxury goods after the USA and will fundamentally shape the times ahead. The value of China’s imports and exports reached a staggering $4.16 trillion in 2013. The status of luxury goods has fueled an obsessive-compulsive behavior for millions in Asia. Over two-thirds of luxury spending by Chinese was made overseas in 2013 and Chinese remain the largest nationality of luxury buyers worldwide, with purchases that make up 29 percent of the global market, according to the China Luxury Market Study from consultancy firm Bain & Company (http://bit.ly/1b8anoG).

Hong Kong receives 30 million Chinese tourists a year who purchase luxury goods to circumvent duties and taxes. China boasts 60 Alfred Dunhill stores and 64 authorized retailers, yet London and the USA has only 3 stores each. Ditto for Armani, Ralph Lauren, Gucci, Louis Vuitton, Prada etc. During the recent great recession, Richemont, Louis Vuitton and other luxury goods houses enjoyed exponential growth in excess of 40% per annum, thanks to the buying power of Asia.

To thwart dependence on an export economy, the Chinese government plans to urbanize 400 million rural people. Closing the inequality gap and ending poverty for 200 million people who have been left behind during the decades of rapid growth are top of the agenda. China is ready to become more active in global affairs and reshape the rules of the game, but the massive demographic problems staring China in the face is major concern that is not openly discussed.

China’s “One Child” policy of 1978 cut fertility rates and prevented nearly 300 million births in the last 30 years. For centuries, Chinese culture valued boys more than girls. Sex selective abortions lead to 119 male births for every 100 females in some provinces. The dire consequences are 32 million more males than females under the age of 20, expected to grow to 51 million by 2020. According to the Chinese Academy of Social Sciences, 111 million men in China will not find a wife due to the imbalances of the sexes. Competition between men will play out in the economic arena as women will choose men with status, wealth and access to luxury goods. A race between Chinese men will have a ripple effect in many arenas, including demands for luxury resources.

China’s proliferation in African economies over the last 12 years dwarfs that of any other country. For the first time large numbers of Chinese are living in Africa, collecting ivory and rhino horn and shipping it out to Asia. China’s infiltration in Africa’s economy goes hand in hand with the devastation of Africa’s wildlife. Africa is losing an elephant every 15 minutes. The current demand for ivory in China in unprecedented. Over the last 100 years, Africa’s elephants have reduced from 3-5 million to less than 400 000 today. Less than 23 000 rhinos remain in South Africa, yet 3 are killed a day due to horn demand.

1. 5 billion people inhabit China, Hong Kong, Taiwan, Vietnam and Thailand, the most prolific rhino horn user countries. If a mere 2 percent of the population in these countries consumed 2 grams of horn a year, the demand would be 60 tons. Assuming South Africa, which has over 80% of rhino populations, harvested 3.5 kg of horn from roughly 15 000 adult rhinos every 3.5 years after sufficient growth, the yield would be 52.5 tons, equaling 15 tons a year. Little empirical evidence exists relating to current demand and it is very evident that demand will surpass supply.

South Africa’s corruption record is another obstacle to legitimate trade in rhino horn. Minister Edna Molewa from South Africa’s Department of Environmental Affairs will apply to CITES in 2016 to legitimize trade in rhino horn with no tangible plan to circumvent corruption. Cohorts of rhino horn trade are oblivious to the massive market forces at play in a country as vast as China. Since CITES agreed to the sale of 106 tons of ivory in 2008 the price has skyrocketed, in part due to the fact that the Chinese government purchased the bulk of the one-off sale and financed the carving factories in Shanghai. The elephant-poaching crisis has disastrously increased ever since, fueled by the insatiable demand in Asia.

Have the South African government and pro-trade campaigners studied the ripple effects of Asian demand sufficiently in their economic models that predict the outcome of legalising rhino horn trade? Few pro-trade campaigners have documented any comprehensive on-site research in Asian demand countries to establish a credible platform that forecasts consumption of rhino horn.

By Dex Kotze