China is already the third largest market for luxury goods with annual sales of more than $2bn but can the heady growth continue?

According to consultancy Henley Centre HeadlightVision, growth in China's luxury goods market is predicted to average 20% a year to 2008 and then slow to 10% a year to 2015.

Despite the apparently rosy outlook, representatives attending a luxury goods conference in Venice this week felt that the industry risks becoming a victim of its very success in China.

They are concerned that China's leaders are attempting to clamp down on ostentatious consumption of luxury and damp what is widely seen as an equity bubble, according to the Financial Times, which organised the conference.

For a country that is nominally still communist, I'm surprised its taken China's leaders this long to realise that in a fast-growing economies — Henley predicts 9.5% growth for China this year — the new-found wealth rarely gets spread around equally.

Presumably, the justification is that a rising tide raises all boats: while only a few Chinese will ever get to own a Rolex, millions more can realistically aspire to own a flat-screen TV.

While the good times roll, western luxury goods firms will continue to do well relieving China's nouveau riche of some of their new-found wealth. But its good to see they acknowledge that chiller winds could one day start blowing in the east.

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