Luxury and the Geography of Authority

China has spent the last two decades buying the good life in French and Italian terms. Now, however, it's building the systems that aim to displace its rivals.

In 2000, Poly Culture Group sent a team to a Hong Kong auction and paid $4 million for three bronze animal heads — an ox, a tiger, a monkey — removed from the Old Summer Palace by British and French troops in 1860. The operation took about an afternoon. The looting had taken slightly longer.

PCG went on to become the world's third-largest auction house, a theatre network spanning more than eighty venues, and the purchasing channel through which almost every regional Chinese cultural institution now operates. The speed of that expansion is striking enough and yet less so, perhaps, than the order in which it occurred. For most of those two decades, the arbiters of what was worth buying, displaying, and attending remained overwhelmingly European.

The Western luxury industry had spent more than a century building the assumption that aspiration, wherever it arose, would eventually point toward heritage brands that had defined the good life in French and Italian terms. And when Chinese consumers accounted for roughly a third of global luxury spending by the early 2020s, that looked like confirmation.

In 2024, however, Chinese luxury spending fell by a fifth. LVMH's Asia ex-Japan revenues dropped 14% in a single quarter. Gucci closed several boutiques in China, including two long-standing Shanghai stores. The standard explanation reaches for familiar variables: the property slump, youth unemployment, Xi Jinping's common prosperity rhetoric, a general atmosphere of unease around conspicuous consumption. All of this is probably true but none of it quite gets at what happened, which is less that Chinese consumers stopped spending than that some of them started spending differently.

At the heart of the spending pivot is guochao, 国潮, the "national wave." At its most interesting this isn't just a slogan to buy domestic but a question about how the Western luxury hierarchy came to feel self-evident in the first place — how much reflects timeless quality, and how much is the afterlife of an earlier distribution of power? The question is now attracting commercial answers, and one of the most instructive is Laopu Gold.

Laopu was founded in Beijing in 2009 by Xu Gaoming, a former fisheries clerk, as a shop selling traditionally handcrafted goldware. Its pieces draw on techniques — filigree inlay, hammering, hollowing — that have been practised in China for more than two thousand years, and on iconography from the Ming and Qing dynasties: gourds, dragons, cloud patterns, the Vajra pestle. Its decisive move was refusing to price by weight. Every other gold retailer in China sold by the gram plus a labor fee, which made gold a commodity and foreclosed any claim to brand value. Laopu set fixed prices, raised them periodically, opened only in the same malls as Hermès and Cartier, and offered private rooms and one-on-one consultations to its clients. The result, by 2024, was 167% revenue growth and a market capitalisation of $14 billion. Meanwhile, Tiffany's share of the Chinese high-end jewellery market fell from 39% to 31% in a single year.

In 2025, Bernard Arnault was spotted on Nanjing West Road in Shanghai — his third consecutive annual inspection visit to China. He was observed entering the Laopu Gold store at Shanghai IFC, where he spent approximately thirty minutes before describing its products as "very exquisite, very interesting." The customer overlap between Laopu and LVMH's portfolio brands runs at 77%.

At the China International Import Expo that same year, Jean-Christophe Babin, CEO of Bulgari, told a room of luxury executives and government officials that Laopu and Bulgari "share the same values" given both were rooted in imperial traditions going back more than a thousand years. "The fact that there is a reemergence of Chinese pride in its arts," Babin said, "is the best that we can expect." Which is the sort of statement that only becomes necessary when something has happened and it begs an explanation.

Still, appetite is not authority. Consumer sentiment doesn't by itself create the infrastructure that makes a cultural hierarchy feel natural rather than chosen. For that you need what Anbang Insurance discovered it had not bought when it paid $2 billion for the Waldorf Astoria New York in 2014.

To be sure, the deed transferred. What didn't accompany it was the social machinery that had made the room worth so much: the curators and collectors and editors, the people whose presence was not a consequence of the Waldorf's authority but its actual source. The building became nobody's. It turned out that you can buy the Waldorf; you cannot buy the people who made it matter, and without them you are in the hotel business.

Belmond understood this long before anyone framed it in such terms. The group was founded in 1976 with the acquisition of the Hotel Cipriani in Venice — the property that Giuseppe Cipriani, founder of Harry's Bar, had built on the tip of the Giudecca Island in 1958. Harry's Bar was where Hemingway had his reserved table, where Toscanini and Peggy Guggenheim and Truman Capote came, where the Bellini was invented, and so on. The hotel that Cipriani built across the water extended the same logic of collecting the people whose presence is the argument, and giving them somewhere to be.

LVMH acquired Belmond in 2019 for $3.2 billion — 46 hotels, trains and safari lodges — five years before Laopu's breakout. The infrastructure that followed, the Bulgari properties in Rome, Milan, Tokyo and Shanghai, the Louis Vuitton hotel rising on the Champs-Élysées, the foundation spaces and invitation-only events that punctuate the calendar, is the mechanism through which a brand acts on a person rather than being chosen by them. A Vuitton bag can be counterfeited at negligible cost. Dinner at Arnaud Donckele's Plenitude cannot. The room does not make an argument. It is the argument.

The numbers confirm where this is heading. The personal luxury goods market has stagnated at roughly $412 billion. Luxury hospitality, already worth around $270 billion, is the serious growth engine. The logic, beneath the rhetoric about heritage and savoir-faire, is defensive: concentrate in the cities where authority is contested and control the terms on which the brand is experienced. Every node consolidated in Paris or Rome is an implicit concession that the universal claim is becoming a more local one.

Guochao's institutional turn does not storm that room. It builds another one, in a different city, with its own community of recognition, and undertakes the slow work of making attendance there feel equally natural. PCG in 2000, paying $4 million for three bronze heads that were already Chinese, was not making a cultural statement. It was making a start.