A survey by McKinsey & Company shows that around 50 percent of Chinese consumers bought luxury goods to give others as gifts in 2009, the China Economic Weekly reports.

In 2009, the luxury products market in China increased by 12 percent, accounting for 27.5 percent of the global market, according to a report by consulting firm Bain Company. The report predicts the total amount spent on luxury goods in China will reach US$14.6 billion in five years, which will top the global market.

During this year's Spring Festival, or the Chinese Lunar New Year, more than 1,000 Chinese tourists swarmed to New York's Fifth Avenue to shop, prompting international media to say that Chinese people had sent red envelopes to the world during Spring Festival.

A tourist surnamed Zhao, from Qingyuan in south China's Guangdong Province, bought five watches at Vacheron Constantin in New York during the holiday.

"Many of my clients like this kind of watch," he told the China Economic Weekly.

The report says Chinese consumers are getting more and more familiar with international luxury brands. For Zhao, it is his third time shopping in the US.

"My wife and I haven't gone shopping in Hong Kong in a long time, even though it is easy to travel from Guangdong to Hong Kong. We chose to go shopping in the US because the price in the US is the cheapest," Zhao said.

The report also noted that experts have different opinions on whether China should impose a luxury tax.

Pan Qinglin, vice chairman of the Overseas Chinese Federation in north China's Tianjin, says, "Imposing a luxury tax is a good way to reasonably regulate consumption and it could regulate the present inequality in social income distribution."

However, Huang Hai, former deputy minister of commerce, disagrees with imposing a luxury tax.

"China has imposed high tariffs on imported luxury goods and special consumption taxes on some commodities, and the result is that the prices of imported luxury goods are much more expensive than in many other countries. Therefore, some Chinese people turn to shopping abroad even though China needs to increase domestic demand," Huang said.

(CRIENGLISH.com April 20, 2010)