LVMH - Why Is This Man Smiling?

I've always thought that we lived in a world with an oversupply of luxury goods and that in the event of a deep recession a strong correction was bound to hit the large luxury goods conglomerates. Apparently I was wrong.  But I do wonder, where does all the growth come from? China?

Yes, I'd be smiling too if I were Bernard Arnault

From the WSJ
LVMH First-Half Profit Soars, Showing Luxury's Return
PARIS–French luxury goods behemoth LVMH Moet Hennessy Louis Vuitton Tuesday reported a 53% jump in first half net profit, heralding a strong return of high-end consumption and, in a departure from cautiousness seen in previous quarters, expressed confidence in the rest of the year.
All divisions, from perfume to wine posted double digit sales growth with the highest increase coming from watches and jewelry, up 28%... 
not that you asked but

The Christian Dior Group (Paris:CDI) recorded revenue of 9.5 billion euros in the first half of 2010, an increase of 16%. Organic growth (at comparable structure and exchange rates) stood at 14% compared to the same period in 2009. The Group performed particularly well in Asia, the United States and Europe.

Profit from recurring operations in the first half of 2010 increased by 33% to 1,812 million euros.

Group share of net profit increased by 68% to 422 million euros.