China remained the world’s largest consumer of luxury products last year even though domestic sales fell for the first time due to the government’s anti-corruption campaign and increased spending overseas. Chinese spending on luxury goods increased 9% to CNY380 billion in 2014, accounting for 30% of global spending, according to Bain & Company’s 2014 China Luxury Market Study. However, luxury products sales on the Chinese mainland fell 1% from a year earlier to CNY115 billion. Sales of watches and menswear fell the most by 13% and 10% respectively, while purchases of women’s clothing grew 11%. Customers who bought their luxury goods abroad contributed 55% of Chinese luxury spending last year, with Japan and South Korea the hottest destinations due to exchange rate advantages and easier visa procedures. Overseas purchases of luxury goods via friends, relatives and agencies (called daigou in Chinese), accounted for 15% of total spending last year. Of 1,400 consumers surveyed by Bain, 70% said they have purchased luxury goods via daigou and 59% expected to spend more in this way.

Professor Cui Weicheng, who pioneered China’s record-breaking manned deep-sea submersible, the Jiaolong, has joined a little-known startup registered in Hong Kong with an ambitious goal: to build the world’s first commercial deep-sea submersible fleet. He is confident the private company can put together the talent and resources to build a fleet capable of reaching any depth in the ocean. The fleet’s first vessel, the Rainbow Fish, is scheduled to launch in 2019. Designed to reach depths of 11,000 meters, it will be able to visit the still unexplored deepest trenches of the oceans and dive deeper than any other vessel currently in use. Cui envisages that the vessel will eventually be part of a fleet containing a large mother-ship fitted with several ultra-deep landers as well as manned and unmanned submersibles. Cui has already raised CNY300 million for the project, mostly from private investors in Jiangsu province. He needs a further CNY200 million and is looking for more investors, including those based in Hong Kong, the South China Morning Post reports.

Shares in China experienced their worst daily tumble in more than six years on January 19 after regulators punished a number of brokerages for breaking margin lending rules and the prospect of weak GDP data. The benchmark Shanghai Composite Index fell 7.70%, or 260.15 points, to 3,116.35 on turnover of CNY409.9 billion. The decrease was the biggest since June 10, 2008, when the index closed down 7.73%. The Shanghai Composite was the best performer among the world’s indexes last year, gaining more than 60%. The Shenzhen Composite Index dropped 3.39%, or 50.10 points, to 1,428.37 on turnover of CNY276.2 billion. The China Securities Regulatory Commission (CSRC) banned Citic Securities, Haitong Securities and Guotai Junan Securities from opening new margin trading accounts for three months after the three major brokerages were found to have illegally rolled over margin trading contracts for clients. The CBRC also published draft rules aimed at intensifying supervision of entrusted loan products, a kind of shadow banking product that helps issuers raise funds that typically flow into assets such as property and stocks. Outstanding margin loans offered by brokerages more than doubled in the second half of last year. Meanwhile, international investors have been selling out, with exchange-traded and mutual fund outflows hitting record levels. China’s A-share market staged a modest recovery on January 2, gaining 26.78 points, or 0.86%.

The sharpest rally for Shanghai shares in six years a mere 48 hours after the steepest sell-off since 2008 is a clear sign that investors are willing to take a chance that the stock market of last year could be replicated in 2105. “This sudden volatility in Chinese markets will not scare foreign investors. The rally last time took place after a 10% correction,” Khiem Do, the head of Asian multi-asset investments at Baring Asset Management said. In 2008, sharp falls over successive weeks were the trigger point for the Shanghai Composite Index to start an October rally that saw it virtually double over the following nine months. A similar pattern was repeated in 2010, where the peak-to-trough rally was about 40%. Meanwhile, a 10% fall in June 2013 was arguably the starting point for last year’s 50% gain.

China Securities Regulatory Commission Chairman Xiao Gang vowed a further relaxation of rules to allow more Chinese firms to list overseas and pledged more steps in the future to boost Hong Kong-China collaboration in capital markets. There had been 13 items that a Chinese firm had to fulfill before it got approval to list overseas, but the regulator removed six items in the past years, including requirements on sales revenue and company size, Xiao said at the Asian Financial Forum in Hong Kong. Xiao highlighted the opening up of capital markets as a key opportunity in the collaboration of Hong Kong and China in the future, adding that the mutual fund recognition and cross-border investment quota schemes would be key areas to focus on. Xiao said the cross-border investment quota schemes, including QFII, RQFII and QDII, still needed improvement on the rules to facilitate cross-border investing. “The stock connect scheme has been running for two months and the operation has been very well. We are accessing the feedback by investors and will fine-tune the framework when needed,” Xiao Gang said.

The yuan’s appreciation against the euro following the European Central Bank’s bond-buying program is poised to increase the continent’s popularity as a travel destination for Chinese. The euro fell by a full cent against the U.S. dollar to USD1.1511 after the new program was announced, and on January 23, the central parity rate of the yuan strengthened to 6.9795 against the euro. The exchange rate movements are unlikely to benefit tour groups anytime soon, as travel agencies usually pay for packages long in advance, but Chinese travelers can still benefit, as luxury items bought in Europe will become cheaper. Consultancy company Bain & Co said Chinese travelers’ spending on luxury products in Europe increased by 28% year-on-year in 2014. According to global travel search site Skyscanner, Iceland is the most popular European destination for this year among Chinese. High-end travel agency HH Travel in Shanghai said Spain, Portugal and Austria are now more favored by tourists from China with bigger budgets and a higher demand for exclusivity.