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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.

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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

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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.

*

* *

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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%

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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!

Read more in…

Available on Amazon, iBookStore, NOOK, Kobo, Scribd and many other book

retailers worldwide.

>>> NEXT PAGE

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