China will become the world's largest luxury goods market by 2012 as the country’s share of the global luxury market rose two percent to 27 percent over the last five months until the end of May, according to the World Luxury Association (WLA)

Japan's share dropped five per cent to 29 per cent, said the Association. Sales of luxury goods, excluding premium private jets, yachts and vehicles, in China are forecast to continue to rise next year and reach $14.6 billion (£8.9 billion), a 36 per cent year-on-year rise.

"Some 200 million well-heeled consumers with sybaritic taste are increasing consumption by at least 15 per cent annually," Michael Ouyang, chief executive of WLA China.

The Association also said that Europe currently accounts for 18 per cent of the global luxury goods sector, while the US accounts for 14 per cent.