SHANGHAI -- "There is nothing the Cantonese will refuse to eat, and nothing the Shanghainese will refuse to wear" is a popular Chinese adage harking back to Shanghai's 1930s heyday when it had a worldwide reputation for decadence and glamour.

With the media worldwide now awash with images of Shanghai's sweaty nightclubs heaving with leggy beauties in an alluring mix of skintight cheongsam and European couture, and some commentators even proclaiming its imminent return to being the "Paris of the East," Tokyo's status as Asia's fashion capital appears to be under threat.

Despite this -- and the oft-quoted opinion of famed Tokyo architect Shigeru Ban that just as Paris was the world's leading metropolis of the 19th century, and New York its leading 20th-century metropolis, so Shanghai will become the 21st-century's -- people here are generally skeptical of Shanghai's prospects of attaining global recognition on the fashion circuit in the near future.

Josephine Chow, a Hong Kong native and self-confessed fashion addict who has been living in Shanghai for the last two years since being posted here by her real-estate company, is quick to dispel the myth of the city's glamorous party circuit. "Shanghai really lacks anywhere to go out and show off," she moans. "None of the nightclubs in the city are trendy; they only cater to kids in street gear."

Chow, 29, explains that the social scene is hampered by the fact that outward displays of wealth risk attracting the attention of party officials, who are renowned for conjuring up inventive ways of affecting a redistribution of wealth.

"Most fashionable people like to keep a very low profile. The scene here is so small that there's no sense of anonymity, so you don't see many fabulously dressed people in nightclubs or at promo parties," she says.

In Shanghai, in fact, the most flamboyant people in public view tend to be Hong Kong celebrities flown in to add a touch of glitz to a launch event or opening. Most Shanghai jetsetters have strong links with Taiwan or Hong Kong, and tend to do most of their shopping and partying off the mainland.

Meanwhile, tourists from Shanghai, Beijing and Guangzhou are going overseas in ever-greater numbers, and fluent Mandarin is now a prerequisite for sales staff in Hong Kong fashion stores.

Despite the fact that, like the Japanese, Chinese prefer to buy their luxury goods overseas, according to the Boston Consulting Group, China already accounts for 5 percent of the world's luxury goods market. European luxury retailers are scrambling to establish footholds on the mainland, with Shanghai the first point of entry thanks to it being China's most developed, modern and sophisticated city due to its long history as a port through which both goods and ideas were imported from abroad.

Most big brands now operate concessions in one the city's monstrous shopping malls, with labels like Chanel and Dior reporting three-digit growth in 2003.

"There is certainly a new class of Chinese who have a large disposable income and are prepared to spend large sums on fashion," says Gucci store manager Polly Chan. But there is a big difference between being able to afford clothes and being stylish. "We are beginning to see more interest in items that are not heavily branded," says Chan, "but most customers here aren't very sophisticated shoppers."

Having been based in Shanghai for more than eight years, stylist Miwa Hikita has witnessed the developing style of local ladies. "Things are certainly better than a few years ago, when nobody would buy anything that didn't have a brand name prominently plastered all over it," she says.

"But it still feels like the Shanghainese have a lot to learn. Taste is a subjective thing, but Japanese shoppers might cringe at some of the stuff that sells here -- because in terms of knowing how to mix and match different designers, Tokyo is still streets ahead."

Shanghai consumers may be spending more and more on fashion, but fashion-capital status is not conferred by consumption alone -- it also entails being a source of innovative designs and trends.

Shanghai's booming rag trade produces more than 800 million garments a year, but very few of these are designed by Chinese. Despite its relative freedom from Beijing bureaucracy, the city still lacks freedom of expression, and that is reflected in the dearth of creativity in fashion design. Shanghai Fashion Week, a forum for young designers, is widely acknowledged to be disappointing.

"Young designers here haven't had enough exposure to the culture of fashion," says Mitsutomo Kitahara, a Harajuku, Tokyo-based importer of Shanghai-made clothing. " Most designs are very derivative."

Kitahara also points out that, like Japan, China is fixated with European style to the extent that it neglects homegrown talent. "The Tokyo Collections lag behind the rest of the world in terms of business," he says. "But Japan still has its fair share of genuinely innovative creators. It will be a long time before Shanghai produces talents like Issey Miyake, Yohji Yamamoto or Rei Kawakubo."

More importantly, he says, the Shanghainese need to shake off their obsession with an ultra-glamorous image before they can move forward.

Referring to Westerners' typically long legs, big eyes and the women's often curvacious figures, Kitahara added: "We Japanese have learned to accept that we can never be as gorgeous as Americans or Europeans. Chinese people need to make that step before they can offer fashion that the rest of the world will take an interest in."