This week The Economist suggested that “China’s economic slowdown looks to be over.” I would be inclined to agree. GDP growth has fallen to 7.4%, but retail sales came in unexpectedly high. Production numbers are also showing signs of life.

For the past year, I’ve told a consistent story. Yes, China’s growth is slowing. But the Chinese government wanted it that way. As a way of cooling rampant speculation in Chinese real estate, the government did what they had to do to squeeze the animal spirits out of China’s markets. It worked.

The Chinese government also said that it wanted a more “balanced” economy with a strong consumer economy. As addicted to growth as China is, its leaders are smart enough to know that their development model has pretty well run its course. Exporting to Westerners is not a great strategy when the entire Western world is mired in a debt crisis that won’t be going away any time soon.

All the same, the Chinese slowdown has caused investor sentiment to turn sour on some of our luxury goods plays, and not completely without reason. Just this week, for example, it was announced that Swiss watch exports fell in September for the first time in nearly three years driven mostly by a decline in Chinese sales.

Gildo Zegna, the CEO of the Italian fashion house Ermenegildo Zegna, summed up my view of China and the luxury sector in a recent interview with the Financial Times:

“The growth of 20-30 percent we have seen in China can’t continue. That doesn’t mean the market will stop growing, but it means we have to adjust to 10-15 percent growth there. I wish every country we are in grew like that.”

I continue to be a luxury goods bull based on what I expect to be continued strong Chinese demand. Japan continued to vacuum up luxury goods for years after its economy entered what became a multi-decade recession. And China, we should not forget, is still growing — at more than 7% per year.

If I am wrong and China’s slowdown is not yet over, I may reconsider my luxury goods recommendations. But for now, when I look at our “Glamour and Glitz” plays I see wildly profitable companies with deep competitive moats and strong demand from the nouveau riche in China and elsewhere in the developing world.

I said last month that “luxury stocks are one good news release away from enjoying a monster rally,” and I stand by that today.