'The number of wealthy individuals in China is growing very fast, based on the economic boom,' Mr Hoogewerf, who compiles an annual China 'rich list', said in an interview.

His China Luxury Index, which tracks 32 items including the Rolls-Royce Phantom EWB and the Louis Vuitton Speedy Bag, shows prices of luxury products in China jumped 8.7 per cent in the year to February, compared with a 3.5 per cent rise in the consumer price index.

Luxury properties, golf memberships and executive education led the gains, with the price of a 372-sq-m villa in Shanghai rising 18.6 per cent to 19 million yuan (S$4 million). Also fuelling the rise were China's culture of gift-giving and the implementation in April last year of a 10 to 20 per cent tax on certain luxury imports, he said.

Although most luxury goods are imported, they seem to have seen little price relief from the appreciation of the Chinese yuan, which rose 4.5 per cent against the US dollar during the period.

Mr Hoogewerf also said 50 individuals in China had wealth of at least US$1 billion, while 2,000 were above US$100 million and 35,000 exceeded US$10 million.

The growing numbers of China's wealthy have caught the attention of the world's luxury-goods makers.

Richemont's Cartier watch and jewellery brand said last month it planned to open 25 shops in mainland China by March 2008, while Hermes International said in June it aimed to triple its stores in China to 25 in the next five years.

Overseas lenders such as Citigroup and BNP Paribas have set up private banking units targeting clients with investable assets of US$1 million or more.

Several of their Chinese peers, including the Industrial and Commercial Bank of China as well as the Bank of China, are following suit.

REUTERS