CHINA’S yuan devaluation could hit France’s lucrative luxury sector, which has already been impacted by the Asian powerhouse’s tough anti-corruption drive against spendthrift officials, analysts say.

    The Asian powerhouse’s central bank cut the value of the yuan currency three days in a row last week and the currency continued devaluating this week, raising questions over the health of the world’s second-largest economy and sending global financial markets into a tailspin.

    The devaluation also cast a cloud over the global luxury market as analysts worry that Chinese consumers, who make up more than 30 percent of worldwide luxury spending, would be less able to fork out cash for high-end handbags, wines or clothes.

    French giants such as LVMH or Hermes had already felt the pinch of China’s drive to end ostentatious spending and its slowing economic growth, which saw the country’s luxury market shrink for the first time last year, according to consultants Bain & Co.

    And while the triple devaluation in itself is not devastating, it has been taken as a sign that the Chinese economy is performing worse than revealed — and that “will add more pressure on the sector,” said Cedric Rossi, an analyst at the Bryan, Garnier & Co. investment bank.

    “The market (for luxury goods) had slowed down in China, but that was partly compensated by the fact that Chinese people spend a lot more in Europe,” he said.

    “But if the devaluation continues, the Chinese — 70 percent of whom buy their luxury products outside China — could buy less in Europe.”(SD-Agencies)