Craving for luxury goods

When Lord George Macartney was sent by the British monarch King George III to China to trade with the Qing Dynasty (1644-1911), he was told by the Emperor Qianlong, at an audience in Beijing in September 1793, that his empire required nothing from other countries.

But Chinese people have developed such a terrible desire for luxury goods produced by other countries that Emperor Qianlong must be turning in his grave now.

Chinese tourists in Europe and the United States are famous for being laden with shopping bags. Their purchasing power is so strong that the big stores are battling it out to attract them. Many West End stores in London for instance have appointed assistants who speak Mandarin to help cash in on the lucrative new market.

Wealthy Chinese tourists are expected to have spent more than 1 billion pounds on luxury goods during the Christmas sales. The big bucks they spend - coined the "Peking Pound" - has accounted for almost a third of post-Christmas purchases of high-end goods such as Burberry, Mulberry, Louis Vuitton and Gucci. In 2010, 2.5 million Chinese tourists visited Western Europe, up from 2 million in 2009.

Chinese visitors' buying power has also been bolstered by a rise in the yuan against the euro.

As the effects of the economic crisis ripple across the global economy and demand for expensive products plummets, luxury brands face gloomy prospects in North America and Europe.

China is an exception. Chinese spent $23.4 billion in 2009 on high-end handbags and suitcases, shoes, watches, jewelry, clothes, cosmetics and perfumes, according to US global management consultancy firm Bain & Co, and more than half of that was purchased overseas.

Young people born in the 1980s, especially those with wealthy parents, have a better awareness of luxury goods and are more likely to buy them.

China is set to become the world's largest market for luxury goods in five years after overtaking the US for the number 2 slot, according to a blue paper on China's commercial development from 2009 to 2010 released by the Chinese Academy of Social Sciences. China has certainly become a focus for many global luxury companies in recent times, especially since revenue streams elsewhere in the world are stagnating as more traditional markets suffer with uncertainty in light of the economic downturn. Most luxury goods makers have opened outlets in Chinese metropolises and provincial capital cities.

When Emperor Qianlong resisted the British demands, he was criticized for isolating China from the rest of the world.

When the Chinese consumer is one of the best hopes for future economic growth for the rest of the world, it is taken as an embodiment of China's rise. This has attracted the good, the bad and the ugly of the developed nations.

In the years ahead, when the US, Europe and Japan will have no choice but to slow their spending and pay off their debts, China will help pick up the slack.