Luxury goods create conflict for China's communist rulers

That seems to be creating headaches for China's communist rulers, who after three decades of exhorting their subjects to get rich are facing growing discontent over a widening income gap. Officials talk of making sure wealth is more evenly distributed and how to get the rich to tone it down.

As the global economy struggles and China tries to accelerate its shift to a more consumer-led growth model, Beijing's leaders see luxury items as a lucrative revenue source. Many Chinese buy luxury products in Hong Kong or abroad to avoid China's high taxes, so officials are debating a move to slash tariffs to encourage consumers to shop at home.

But the government is loath to be seen as taking measures to support the sliver of the population that can afford that pricey new Hermes bag or latest Ferrari, and it has delayed any decision on cutting tariffs, according to Chinese media reports and industry analysts.

"The government is facing a conflict," said Michael Ouyang, representative of the World Luxury Association in China. "They don't want to promote luxury because they are worried people who cannot afford it will see the advertisements. But they don't want to limit luxury products because it's good for the economy."

"People like showing off their wealth," said Yang Xu, who runs a shop called Vogue 2 that specializes in secondhand designer handbags. "The consumption of luxury products has grown too fast. It's beyond anybody's imagination."