Maria inquires: why are there so many luxury brands in China if everyone is poor? Aside from all the knockoffs, there are quite a few concentrations of very high end stores. My general take is that this is a ‘tail end of the distribution’ sort of thing. Within China, there are 51,000 people “worth over Rmb 10 million” (~USD 1.5 million); and 8,800 with worth over Rmb 100 million (USD 15 million). Assuming that these individuals are not evenly distributed throughout major Chinese cities (more probably live in Beijing, Shanghai and Shenzhen. Incidentally I am told that a foreign passport is the first thing people obtain with super wealth, so a few of these individuals might actually live in the likes of Sydney and Toronto.) Regardless, assume that Wuhan has ~1,000 people with Rmb 10 million. That’s Rmb 10 billion. Conclusion: there are 1,000 or so women walking around Wuhan with a lot of expensive bags, shoes and the like. The current issue of FT’s China Confidential has a special on luxury consumption in China:

Conspicuous consumption in China seemed to go undercover during the economic shock early this year. But this month in the northern city of Xian, it returned with a bark. A wealthy woman identified in media reports only as ‘Mrs Wang’ bought a Tibetan mastiff for Rmb 4m ($586,000, €402,000, £351,000) and had it delivered from the airport by a motorcade of 30 Mercedes Benz cars. It may be that the 18-month-old mastiff, called Yangtze River Number Two, has broken the record for the world’s most expensive dog, eclipsing a cloned Labrador called Lancelot Encore bought by a family in Florida for $155,000 (Rmb 1.06m, €106,300, £97,340) earlier this year. According to the China Daily – which expressed concern over how such an exhibition of wealth could raise tensions among poor people – the dog will be kept in the style to which it has grown accustomed. “The dog will live in an air-conditioned room and eat beef and chicken and drink mineral water,” the newspaper reported.

Even though Chinese savings rates are high, there’s a lot of conspicuous consumption especially among the urban upper class. Shanghai (or China in general) is one place where price is almost never a proxy for quality. Precisely because of the rapid transition from poverty, I’d argue, demonstrations of wealth carry even more importance in China than they do in societies where (at least some) taboos have developed.