Behind the increase in luxury brands, China’s manufacturing industry is silently creating poverty, said Twenty-first Century. Per Goldman Sachs, China is becoming the second largest consumer of luxury goods. With consumption in 2010 at $6.5 billion, luxury goods scored the fastest growth three years in a row. The Ministry of Commerce predicts that, by 2014, China will become the largest market for luxury goods in the world, accounting for 23% of the market share. However, “this may be a blessing for luxury brand names, but not for improving China’s domestic demand,” said the article. “Residential consumption in GDP spending has been on the decline every year, while government consumption is rising consistently. … Booming luxury consumption now has become a symbol of the gap between the rich and poor, and of sluggish domestic demand. It is very worrisome.”
Source: Twenty-first Century, December 30, 2010
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