No rules for the rich: How China spends its new wealth

By Rebecca Marston Business reporter, BBC News

China is expected to import one-third of the world's luxury goods by 2015

Here's a story an upmarket wine merchant told me about a particularly memorable - and potentially instructive - evening.

A group of Chinese businessmen arranged to meet up one evening for a drink. They were asked to bring their best bottle of wine.

Here was a selection of some of the best-known fine wines in the world. Chateau Lafite 1962, Chateau Latour 1970 - bottles that cost in the region of $1,600 (£1,000) each.

On arrival, the host said: "Gentlemen, show your wines," and the guests presented their bottles for each other's approval.

The host then called: "Gentlemen, uncork your bottle," which they did.

He then indicated a vast silver punchbowl and ordered: "Gentlemen, pour your wine," which they did - into the punchbowl.

The mingled contents of some of the most distinctive clarets in the world were then ladled out between them.

It is a memorable anecdote. But it is also instructive, because it illustrates the way China's new rich approach established luxury goods.

Rich keep spending

As the country sucks up more and more of the world's luxury goods production, producers are growing in their understanding of Chinese tastes.

Would you like a mixer with that, sir?

Unlike China's middle class, which is suffering from high inflation, the rich feel no such drag upon their lifestyle.

BMW, which also owns the Rolls-Royce brand, almost quadrupled its first-quarter profits thanks in part to increased demand from China.

It joins a long list of leading luxury brands whose profits have been spurred by demand there.

According to Barclays Capital, the country now buys 12% of the world's luxury goods.

A research report from Barclays says this is set to grow by 20-30% a year. It means in five years' time China could be buying a third of the global luxury goods ouput.

That is a staggering growth rate, but if you look at the increase in the number of millionaires it is not hard to see how it could rise so fast.

There are around half a million Chinese millionaires, 31% more than in 2008, according to the most recent Merrill Lynch Cap Gemini World Wealth Report.

Donald Holdsworth, director of MatchPower in Australia, has been fascinated by China's growing love affair with luxury since the 1990s.

Little emperors

Why does he think the desire for luxury goods has seized the Chinese mind so firmly?

The answer, he thinks, is rooted in demographics: "The average age of a Chinese millionaire is 39 - that's 15 years younger than in the developed world.

"It happens to coincide with the start of the one-child-per-person policy - the year of the Little Emperors. These children were given the very best by their parents."

So the Little Emperors grew up with as many resources as could be mustered by their parents - at the same time as the economy shifted from communism to capitalism.

That, says Donald Holdsworth, sheds further light on Chinese tastes: "If you've grown up in a conformist society where there's no freedom of speech, once a chance appears for you to express yourself without danger you are going to take it.

"It's like unscrewing the top from a bottle of fizzy water."