By the late 1990s, it was clear that the earlier explosion in and profusion of goods had not heralded a prolonged or sustained consumer boom so much as another cycle in which an increase in demand was followed by exaggerated expectations and excess supply. Domestic demand for existing consumer durables and electronic goods fell short of supply. Meanwhile two of the ‘super three new big things’ demarcating the onset of the third phase in China’s consumer revolution, were so new and ‘big’ that only a small minority could acquire or even aspire to their ownership. If shopping can be taken as one barometer of domestic demand, then, from the mid-1990s, all the signs suggested that the average propensity to consume was diminishing as fewer customers frequented the malls and the department stores. There was more interest in window shopping than purchasing, more interest in bargains than brands and fewer customers for most foreign-branded goods. The fast-expanding retail sector was thrown into disarray as shopping malls closed, some very soon after their grand openings. Above all the growing interest in spending was inhibited by further economic reforms which threatened urban jobs in the state sector, by declining income-growth, uncertain pensions and by rising costs of services and utilities. These all dealt a substantial blow to up-market spending and made it more common to save rather than shop despite the government’s best efforts to encourage consumption. For many intellectuals in the cities, the material habits of the West no longer constituted such a desirable model especially if, as it seemed, the rush to emulate foreign lifestyles, ambience and architecture was causing China to lose a sense of its own cultural identity borne of a long history and tradition. Foreign manufacturers hoping to sell China-made products in the domestic market were forced to turn to the export market to sell their goods. As for the outside view of China’s market: either demand had weakened or perhaps it had never been as deep or as wide as it had promised. Certainly, around the turn of the century, there was greater recognition that the still-opaque China market had once again proved diffi cult to penetrate and that, after 15 years of reform, it had become increasingly differentiated, requiring new levels of market research to identify the new and multifarious segments. In the meantime, the fi rst sign of a downturn in the average propensity to consume in the mid1990s was a levelling off in retail sales in most goods, pushing the acquisition of

two of the ‘super three new big things’ and thus the onset of the third phase in China’s consumer revolution further into the future.