It’s more than 700 years since the first travellers along the Silk Road returned to Europe bearing the finest scarves and carpets from the Orient – back when ‘made in China’ signified both quality craftsmanship and a taste of the exotic. More recently, it has been the surge in demand for foreign luxury goods driving high-end trade from West to East – but there are signs that Chinese style, workmanship and mystique may once again make affluent Westerners swoon.

Those signs are coming from within China, as hubs of creativity find a voice, and from the European gatekeepers of luxury, who are increasingly seeking up-and-coming Chinese brands that they can invest in. Paris-based LVMH has created a $650m (€443m) private-equity fund, L Capital Asia, targeting Chinese and Indian brands with the potential to become global names. It has already bought into two Singaporean companies – shoemaker Charles & Keith and watch retailer Sincere – and in Hong Kong’s Emperor Watch & Jewellery. LVMH already has a stake in Hengdeli, China’s biggest watch retailer, and a hook-up with a leading Chinese fashion name is understood to be imminent.

Milan-based Prada, which in June became the first Italian firm to float on the Hong Kong stock exchange, showed its main collection in Beijing in January and plans to inaugurate a design studio in Hong Kong this year.

These efforts to develop relationships with China have largely been driven Spyker and a partner in China. And Beijing-based First Auto Works, which used to make Chairman Mao’s Red Flag limo, plans to revive the brand with the annual production of something that resembles a Rolls-Royce Phantom set to begin this autumn.

At the same time, Chinese interests have been getting the inside track on high-end retailing by investing in established, quintessentially Western companies. Hong Kong interests now control Savile Row tailors Hardy Amies and Gieves & Hawkes, for example.

Apart from NE.TIGER, contenders for global expansion include jewellery brand Qeelin, founded in 2004 by a Chinese designer and a French jewellery veteran – which has boutiques from Paris to Tokyo – Mary Ching Shanghai shoes, which are making an impact in Shanghai and London, and LAN Fine Jewellery, launched in 2009 and endorsed by TV personality Yang Lan and Canadian singer Celine Dion. LAN’s website offers visitors English and French pages. And heritage cosmetics company Shanghai Jahwa is breathing new life into Shuang Mei (‘Two Sisters’), which has been renamed Shanghai VIVE and offers soaps and lotions at prices comparable with imported luxury names.

Will they succeed? Well, it seems that the Chinese government is on their side. In its recently launched five-year development plan, Beijing determined that the country should be nurturing domestic brands, though exactly what this will mean is so far unclear.

Doreen Wang, group account director with market research and brand consultants Millward Brown in Beijing, suggests brands that transport buyers to the glamour and romance of 1930s Shanghai, or have more ancient Chinese associations, such as health and beauty products linked to herbal medicine, stand to gain traction early, with fashion following later.

“China will definitely create its own luxury brands, but it will take some time,” she says. “Shanghai has a luxurious heritage, with glamour and movie stars and an edginess to it that’s still there today, and that’s a good foundation to build a brand on.” She sees potential in the export of liquor brands such as Wuliangye and Maotai, herbal cosmetics such as Ji Bai Cao, and even high-end toothpaste Yunnan Baiyao, which is said to contain an ingredient used by soldiers in China 1,000 years ago to stem bleeding.

However, Wang says, in some categories like fashion, it will be harder. “This is partly because our education system means we’re better at learning than we are at creating, so we don’t have many world-class fashion designers.”

Lucian James, who runs Agenda Inc, a Paris and San Francisco-based consultancy advising luxury brands such as Estée Lauder, LVMH and Harley- Davidson, says Fashion Week in China is being studied more closely each season in an effort to identify rising stars. What’s more, everyone is conscious of the fact that ethics, harmony and virtue – values that now, as then, are central to the promises of many luxury names – were China’s hallmarks in the 18th century.

James points to the success of luxury brands targeting the corporate male in China, such as Dunhill, as an indication of where local brands might focus. Fine porcelain – china from China – is another logical area for growth. “It’s also interesting to think whether we might see the rise of a more provocative kind of luxury brand,” he says. The detention of artist and activist Ai Weiwei has grabbed people’s attention, and ethical luxury is gaining momentum. “I’m sure international consumers would be interested in a Chinese brand that had a slightly edgy point of view,” says James.

That just leaves the small matter of what ‘made in China’ implies. If luxury is all about authenticity and quality, then the country faces a challenge. Known as much for being the world’s counterfeit capital as its strongest growth market for luxury imports, China will have to work hard to shed its image as home of the not-quite-Burberry and the phony LV monogram. Even when it announced its arrival on the world stage by hosting the 2008 Olympics, the manner in which it faked the pyrotechnics (using CGI during coverage of the opening ceremony) showed that there was still work to do. On the flipside, the quality of some of the fakes being churned out shows that the craftsmanship is there to build genuine quality goods and, ultimately, brands.

Anholt points out that popularly held opinions about countries and their products are slow-moving phenomena. “It took the world years to fully register that Japanese products had evolved beyond cheap plastic rubbish and into desirable products, and it won’t happen overnight for China,” he says. “China’s great advantages are that it has the example of Japan to follow... and 20 times as much money to spend.”

To an extent, other brands from around the region have been broadening Western minds to what Asian-made means. Singaporean designer Wykidd Song sells in Barneys’ label-obsessed department store in New York and London’s Harrods. HTC is Taiwanese but is probably seen as Chinese in most Westerners’ minds. Jimmy Choo is no longer owned by the eponymous London-based Malaysian- Chinese entrepreneur. Asian hotels are synonymous with refinement and outstanding service, and Japanese and Korean brands are now held in esteem.

Millward Brown’s Wang says the Chinese brands she works with see themselves as following in the footsteps of Korea and Japan, but are rapidly catching up. “It should take them less time because they’ve dedicated themselves to learning from those brand-building lessons and avoiding similar mistakes.”

Curiously, prejudices about China may take longer to overcome closer to home; having only recently made an international name for the quality of their own goods, Korean and Japanese consumers see China’s rising as something of a threat. They also bear the scars of history, and animosity between China and its neighbours runs deep.

The Anholt-GfK Roper Nation Brands Index shows that while Chinese products are ranked ninth out of 50 countries by British and American consumers, and 25th and 26th by Italians and French, they come 46th and 50th when it comes to Korean and Japanese consumers.

Acceptance of brand China in the West will accelerate, Anholt says, if China’s brand of communism continues to reinvent itself. “If China can hold itself together long enough to complete these reforms, it will also have removed the final barrier to full acceptance in the global community. It will utterly dominate many if not most international marketplaces.” In which case, we might even see American brands adopting Chinese-sounding names to get a head start in the market.

The current excitement in China about all things Chinese is palpable, but tradition has taught its people to have patience. It’s hard to judge whether Chinese luxury labels will make the cut in months or years – but as the old proverb says, it takes a decade to sharpen a sword.

WHY ‘HIGH-KEY-LOW- KEY’ IS ALL THE RAGE

Hermès’ launch of a brand for the Chinese market that sounds and feels Chinese, is designed by Chinese and has very little that’s foreign about it speaks volumes about the evolution of the affl uent Chinese consumer.

A decade ago, Hong Kongers joked about wealthy, unrefined mainland neighbours leaving the designer labels on their suit jackets to make sure everyone knew just how much they’d spent, and on which international name. New homes looked like decadent replicas of Western structures from the outside but had the most basic furnishings inside. Wealth in China meant ostentation; purchase decisions were made more to impress other people than bring pleasure to the self.

The new Hermès range, Shang Xia, has a Chinese head designer, uses Chinese materials and techniques and is proudly made in China. Similarly, when Ferrari launched a China-only limited-edition model, it was with a jade starter button and Chinese-script speedometer, and came with a piece of leather luggage embroidered with the route of the original Silk Road. And Levi’s, while more an aspirational rather than luxury brand, has launched a China-specific brand, Denizen.

Research by KPMG and TNS among big spenders in China found growing interest in connoisseurship and a shift away from exhibitionism. In addition to spending on luxury goods, they’re increasingly spending on hotels, holidays and traditional pastimes such as calligraphy, which is undergoing a resurgence in popularity.

“More affluent Chinese consumers are becoming ‘high-key-low-key’, which means they still want to be conspicuous but in a low-key way,” says Millward Brown’s Doreen Wang. “A few years ago, if you asked Chinese consumers why they bought luxury goods they would say because it signals their social status, it’s about image. Now, they’re not showing off so much but demanding top service and quality; they’re starting to appreciate brand heritage.”

A 2007 Nielsen survey asked consumers all over the world if they’d buy certain products if they bore the marque of a luxury fashion brand; in China, three- quarters said they’d buy a laptop, 60% a mobile phone and 23% a kitchen appliance. Only 6% said they wouldn’t buy anything on the list, the lowest of any of the 47 countries surveyed. Yet, even then, there were signs of interest in home-grown labels. When asked which brands they’d buy if money were no object, Chanel, Louis Vuitton, Valentino and Versace topped the list, but more than a quarter of people named Chinese brands.