“Italian luxury items on sale. Final three days. Don’t miss it!” yelled a voice over the loudspeaker at an entrance to one of the stores.

Inside, tourists and middle-aged women are packed into the cramped store for T-shirts, leather wallets and belts that bear logos similar to those of LV and Gucci but cost a suspiciously low price.

“Nobody really cares whether our wares are Italian or French,” said the shop assistant, surnamed Zheng.

“It’s foreign and it’s on sale. That’s enough,” she said impatiently. But both factors are questionable if not false, given that the sale has been in its “final three days” for years. The word sale and cheap and final always attracts the Chinese customers.

Italian-born Pierre Cardin kicked off China’s first fashion show in Beijing in 1979. The nation’s appetite for foreign, colorful fashion was whetted and is still seemingly unlikely to be sated.

While foreign fashion houses are aggressively expanding their presence in the world’s largest consumer market, some Chinese businessmen are undermining their efforts by producing low-quality clothes, shoes and accessories and slapping on a foreign label.

In March, the Italian Trade Commission produced a list of 30 Chinese brands that falsely claimed Italian origin.

None of the 30 brands had ever been registered in Italy, nor could any part of their production process be traced to the country, according to the Italian commission’s Beijing-based office.

“It should be stopped, because we have spent hundreds of years building a strong image for Italian products,” said Antonino Laspina, the commission’s chief representative in China.

Most of the 30 counterfeit Italian products are produced in Guangzhou or Wenzhou, according to an earlier report by China Youth Daily.

“When people talk about Italian products, they know they are buying into the best quality in the world. But if the consumers find they have paid a high price for something that is totally not worth it, it will cause irreparable harm to (authentic) Italian brands,” Laspina said.

Whether consumers of counterfeit brands are truly unaware of the origin of their bargain luxury goods or simply wish to sample a lifestyle that they may not be able to afford, a look back into the history of Chinese fashion may help decipher the country’s widespread mentality of brand-worshiping.

“For people of my generation, a foreign brand means style, quality, and perhaps the only thing you need to be fashionable,” said 58-year-old Lu Yongli.

Following the fashion show by Pierre Cardin in the Cultural Palace of Nationality in Beijing decades ago, scores of brands, including Playboy, Montagut and Cartelo, quickly penetrated bigger cities such as Beijing and Shanghai in the late 1980s and became a symbol of status and wealth.

Statistics from Southern Weekly showed that during the country’s first international luxury exhibition in Shanghai in 2005, business transactions totaled 200 million yuan ($31.7 million) within three days.

“A leather bag belonging to a dageda (the Chinese label for the first generation to use cell phones) previously could have any foreign logo on it and would have been considered a luxury item. Today, it would have to be LV, or perhaps Hermes,” Lu said.

Lu, a Shanghai housewife, remembered purchasing her first luxury bag – a red Playboy calfskin shoulder bag – in the early 1990s.

She recalled the bag cost her 700 yuan, while the average monthly income at the time was around 200 yuan. It was not available in domestic stores and was brought by relatives from overseas.

“Luxuries, then and now, may still be comparatively expensive, but unavailability made them more precious, just like the Hermes Birkins bags today,” Lu said.

Zhou Ting, an associate professor at University of International Business and Economics in Beijing and an expert on the luxury industry, said the problem partly stems from the limited supply of authentic luxury items.”Essentially, demand from the country’s emerging middle class greatly outstrips the amount that brands can supply,” said Zhou.

But Giovanni Musacchi, chief executive officer of Italian Fashion Way China, explained the conundrum facing Italian workshops and brands that venture into China, “a market where three big cities “consume as much attire” as Italy.

“Of course we don’t need to tell our partners what a large market China is. The major concern for most of the companies would be, after arriving in the market, how to supply such a large nation while not lowering quality,” he said.

Musacchi’s company currently works with about 300 Italian fashion brands, which often prefer to seek cooperation with Chinese companies.

The ban, published on the ministry’s official website, has been seen by some as a response to formula manufacturers who include the ingredient in their products in order to reap greater profits, as some customers believe bovine colostrum is beneficial for the health of their children.

Bovine colostrum is the milk produced by healthy cows during the first seven days after they give birth.

According to industry insiders, China is the world’s largest bovine colostrum consumer, although the health benefits of formula made with the material have yet to be determined.

The stipulation will take effect on September 1. Prior to that, related products made or imported in accordance with laws and regulations can still be sold before they expire.

The statement urged manufacturers of bovine colostrum-based dairy products to manufacture their goods in accordance with national and industrial standards.

Since April 1, those taking domestic flights are paying 50 yuan ($7.94) in development fund fees, while international passengers are paying 90 yuan (including 20 yuan in tourism development fund).

The two-decades-old airport tax, or airport construction fee, which was 50 yuan per person for domestic flights and 90 yuan for overseas flights, has been repealed.

When reached by China Daily website on Tuesday afternoon, however, employees at China Eastern Airlines and China Southern Airlines said they were not aware of any change in fees.

In other words, T.I.C. This is China, same fee same amount a different name and some new news to report.

The charges are collected by airlines, who then hand it in to the central Treasury as part of the government fund under the supervision of the Finance Ministry and auditing department. It will be spent on civil aviation infrastructure construction, airline subsidies, energy saving and emission reduction, general aviation development and other aspects, according to the notice.

US consular officials in China issued more than 453,000 visas in the current fiscal year’s first half (October-March) compared with 310,000 during the first six months of fiscal 2011, a 46 percent increase, the State Department disclosed on Wednesday. In other words the United states are just rubber stamping everyone a visa to the United States.

As part of its “Jobs Diplomacy” agenda, the department has been stepping up visa processing because travelers are an important economic engine for the US. The average Chinese tourist spends about 5-7,000 USD per trip.

Earlier this year, Obama called for a national strategy to make the US the world’s top travel and tourism destination, to generate jobs and revitalize the still-recovering economy.

More than 1 million US jobs could be created over the next decade if the US increases its share of the international travel market, officials estimate.

Among other initiatives, the State Department has cut the average waiting time to five days for Chinese applicants seeking an interview for a US visa. The department is also considering the addition of visa-issuance services in Wuhan.

To further streamline processing, the department recently dispatched its first group of “consular adjudicators” to consulates in China to help regular Foreign Service employees. The new hires undergo similarly rigorous security screening as the more traditional diplomats but are recruited based on their Mandarin-language skills.

The Chinese mainland is on its way to becoming the leading source of cross-border tourism in the world, according to a report last week by the National Tourism Administration and China Tourism Academy.

Mainland tourists made 70 million trips to foreign countries, as well as to Hong Kong, Macao and Taiwan last year, up 22 percent from 2010.

Jiang Yiyi, director of China Tourism Academy’s International Tourism Development Institute and one of the main compilers of the report, said that figure was 1.2 times the number of US citizens who traveled abroad in 2011.

“The US’ visa application process was really inconvenient in China, particularly for those who do not live in Beijing and Shanghai,” Zhao Jie, 28, who has lived in New Orleans since 2008, told China Daily on Wednesday.

“My friends used to waste their flight tickets back home in other cities because the visa application interview got delayed in Beijing,” she said.

“US citizens should not only take Chinese tourists’ money but also furnish more convenient and comfortable conditions to win over Chinese tourists’ hearts,” said Cao Xi, a 28-year-old Beijing resident who chose the US for her honeymoon destination three years ago.

“I would like to visit the US again to celebrate our marriage anniversary this year if the visa application could be much easier,” she said.

The State Department initiatives also include Brazil. US consular officials in that country issued more than 555,000 visas in the first half of fiscal 2012, a 59 percent increase from the same period a year earlier.

CSR, China South Locomotive & Rolling Stock Co Ltd, launched the test train, which can reach speeds of up to 575 kilometers an hour, the paper said.

Liang Jianying, deputy chief engineer at the subsidiary company CSR Sifang Locomotive & Rolling Stock Co Ltd, said the train was in good condition and the speed will be further improved.

The test train aims to promote the development and security monitoring of high-speed trains and will not actually run as a business operation, said Zhao Xiaogang, chairman of CSR.

In December 2011, CSR launched a test train with speeds reaching up to 500 kilometers an hour.

China will continue to increase the speed of trains during the 12th Five-Year Plan (2011-2015), according to a project of the development of high-speed trains issued by the Ministry of Science and Technology on Wednesday.

Consider this: The average price for permanent license plates for non-commercial vehicles hit a record of 61,626 yuan, or about $9,780, at a city auction on Saturday, China media report. The high cost is leading scalpers into the market to sell temporary plates at inflated prices, according to a report in today’s Shanghai Daily.

China has emerged as the world’s largest auto market in recent years – good news for GM, Ford and other foreign companies looking for new customers. High demand for plates in growing, crowded cities like Shanghai leads the government to auction them off and prices to rise.

Consider this: The average price for permanent license plates for non-commercial vehicles hit a record of 61,626 yuan, or about $9,780, at a city auction on Saturday, China media report. The high cost is leading scalpers into the market to sell temporary plates at inflated prices, according to a report in today’s Shanghai Daily.

China has emerged as the world’s largest auto market in recent years – good news for GM, Ford and other foreign companies looking for new customers. High demand for plates in growing, crowded cities like Shanghai leads the government to auction them off and prices to rise.

Italy gave the 6,000-square-meter pavilion, one of the largest at the Expo, to China, joining the governments of Saudi Arabia, France, Spain and Russia in giving away their pavilions. They will remain permanently in Shanghai.

Renamed the Shanghai Italian Center, the pavilion will display Italian art, cuisine and other famous products. It was redesigned to hold permanent exhibitions and serve as a platform for economic and cultural exchanges between the two countries, said Stefano Karadjov, executive exhibition producer with the Triennal di Milano, who is in charge of the design of the new exhibition.

Its first and second floors will feature Italian handicrafts, art works, food culture, and jewelry. A replica of the David, a masterpiece statue created by Italian Renaissance sculptor Michelangelo, and some design drafts by Leonardo da Vinci will be the main attractions in the pavilion.

There is also a 900-square-meter exhibition hall for Ferrari racing cars.

The pavilion received 7.3 million visitors during the six-month Expo 2010, most of whom waited for hours to get inside. The Italy Pavilion will be open from 9am to 5pm every day except Monday.

The benchmark consumer price index increased 3.6% last month from a year earlier, mostly as a result of higher food and energy prices, according to government figures released on Monday. Everyday things in Shanghai is still rising.

That was higher than the 3.2% increase in the index in February, but well below January’s 4.5% rise and also lower than the average reading of 3.8% for the first three months of the year. February’s low reading was mainly due to the distorting effect of the Chinese Lunar New Year holiday, which came unusually early this year, and analysts said inflation remains a concern to officials, who are wary of loosening policy too soon.

“We think that today’s CPI inflation number is unlikely to lead the [central bank] to ease monetary policy soon,” said Liu Ligang, an economist at ANZ bank. “We believe that [its] policy outlook will continue to be biased towards caution.”

Persistent price rises have been steadily slowing since last July — when the CPI hit a three-year peak of 6.5% — in response to moves to rein in bank lending and cool the surging real estate market.

China’s producer price index turned negative in March for the first time since November 2009, dropping 0.3% from a year earlier, in a sign that consumer inflation will also continue to decline gradually.

Even so, the government remains alert for any sign that prices could accelerate again, especially politically sensitive food prices, which increased 7.5% in March from a year earlier, compared with February’s 6.2% increase.

That means officials will have less room to counter increasing signs of a broader slowdown in the Chinese economy. Once you draw liquid money from the economy, everything slows down. It’s the first time in 16 and 1/2 years I see so many empty store fronts and no one renting.

“Monetary policy is already quite loose and the central bank won’t loosen more unless it wants to die,” said Yuan Gangming, a senior researcher at Tsinghua University.

With inflation still a worry and Beijing intent on tamping down real estate prices, most analysts believe the central bank is unlikely to cut interest rates any time soon. But growing signs of weakness in the overall economy could prompt it to inject more money into the banking system by reducing the large proportion of deposits that banks must hold in reserve.

Beijing is set to publish first-quarter gross domestic product figures on Friday that are likely to show the world’s second-largest economy grew by around 8.4% from the same period a year earlier, down from 8.9% in the fourth quarter of last year.

While the slowdown remains relatively mild, some economists have predicted a more pronounced deceleration could come later in the year if the troubled housing market falls further and exports continue to decline.

On Tuesday, the government will release trade data for March that is expected to show a slight decline in exports to Europe, China’s biggest trading partner.

Shanghai workers aren’t the only ones enjoying an increase in take-home pay. In China, minimum wages are set city by city and province by province. For instance, the same day the city’s government unveiled its plan to lift salaries, the official Xinhua News Agency reported the northeastern province of Shandong would be raising its minimum wage, too. The provincial government is mandating an increase in the monthly wage by as much as 19 percent, Xinhua said, with full-time workers in the most developed parts of Shandong entitled to make a minimum of 1240 yuan ($197). And Shandong workers can expect more raises to come, with the government planning annual wage increases “of at least 13 percent in the years to 2015.” This month workers getting the minimum wage in Shenzhen, adjacent to Hong Kong, got a 13.6 percent raise. Foxconn Technology Group (HNHPF), a big Shenzhen employer that makes iPhones, iPads, and other products for Apple (AAPL), in February gave pay increases ranging from 16 percent to 25 percent. As salaries rise so does production costs. I see man manufactures looking to produce else where in the world as the costs sky rocket in China.

Shanghai, Shandong, and Shenzhen are on China’s coast, which has benefited the most from the Chinese economic boom, so you might expect their wages to be rising. Even provinces in China’s poorer interior, though, are pushing through significant increases in minimum wages. Starting Apr. 1, Gansu, a landlocked province that has not been a major investment focus for export-oriented companies, is going to raise its minimum wage by 13.5 percent to 860 yuan. By the end of 2015, Xinhua reports, the province aims to have its baseline monthly wage at 1,500 yuan. Similarly, the southern province of Guangxi is pushing through a big wage increase, with Xinhua reporting on Feb. 15 an increase of about 22 percent, with workers in Guangxi’s biggest cities now required to earn at least 1,000 yuan a month.

Why the widespread interest in increasing minimum wages? In part, local leaders are simply responding to directives from on high. As part of its latest five-year plan, the country’s Communist Party leadership wants to make sure workers can have more take-home pay, which should help with the government’s goal of shifting the Chinese economy’s focus toward domestic demand and away from export industries.

Local governments are also competing with one another to show they’re the most worker-friendly. With demand for workers so strong, governments are finding they need to raise wages in order to keep locals from migrating to other provinces where the pay is better. According to Xinhua, one reason for Shandong’s new minimum-wage policy is “a bid to attract workers and buffer rising living costs.”

The labor shortage isn’t limited to factory workers. Workers for desk jobs are also in short supply. “There just aren’t enough people,” says Shaun Rein, managing director of Shanghai-based market research firm CMR China and author of the new book The End of Cheap China. Rein points to announced plans by Citigroup (C), Microsoft (MSFT), Google, and others to boost their number of workers in China. “That’s creating a huge fight for white-collar workers,” he says. “Salaries are soaring.”

Rising wages along the coast and in the interior put many companies—both foreign and local—in a bind. Hit by increased labor costs in traditional manufacturing regions like Greater Shanghai in the east and the Pearl River Delta in the south, many manufacturers are already shifting production inland to places such as Sichuan, where wages are supposed to be lower. But with even poor provinces like Gansu and Guangxi mandating big increases in minimum wages, the inland areas might not provide much relief.

Some manufacturers scared by rising labor costs have the option of moving to low-wage locations in Southeast Asia. (See my colleague Dexter Roberts’s story last month about the shift of textile companies to Cambodia.)

However, for many companies, picking up and moving to another country isn’t possible: Multinationals that want to compete in the fast-growing Chinese market have little choice but to keep raising pay much faster than in other parts of Asia. For instance, British recruiting firm Hays (HAS:LN) released on Feb. 8 a survey of more than 900 companies that found about 72 percent of employers in China raised salaries for white-collar workers by more than 6 percent last year; that compares with 21 percent of employers in Hong Kong and Singapore and just 7 percent of companies in Japan. And there’s not going to be any letup this year: According to Hays, 81 percent of employers in China are planning to bump up salaries by more than 6 percent, vs. 32 percent of employers in Asia as a region.