HONG KONG -- Kelly Chai, a white-collar worker at a technology company in Beijing, hasn't spent any money on luxuries for a while.

Once upon a time, Chai used to buy lower-end Louis Vuitton products, but she now refrains from spending even $400 on a Coach handbag. "I could not make up my mind. I feel it's not necessary," said the mother of a 7-year-old, adding that her money is better spent elsewhere.

For years, companies selling luxury goods have counted on China for growth. They relied on Chinese consumers for a third of their global sales. But the momentum appears to be slowing as some in the middle class cut back to cope with swelling bills and shrinking wealth.

For Chai, $2,300 of the monthly family income is spent paying down a mortgage for an apartment near a good primary school so that her son can attend it. Fees for his school, private tutoring and extracurricular activities cost another fortune.

The cash drain facing households like Chai's is prompting economists to warn of a further slide in spending, as luxuries and high-value items are an early indicator of consumer caution when a country faces a shaky economic future.

Hong Kong, where mainland shoppers converge in search of duty-free luxury goods, is also feeling the heat. The year-on-year sales growth for jewelry, watches and clocks, and valuable gifts slowed to 2.2% in September from 20.8% in the previous month, the statistics department announced on Thursday.

"We have seen that Chinese consumer confidence is off the peak," said Luca Solca, an analyst specializing in luxury goods at Exane BNP Paribas, in an email to the Nikkei Asian Review. "If the downward trend continues -- and it could be exacerbated by the international trade tensions -- then we may see luxury spend growth fading as a consequence."

In the past decade, Chinese have been among the biggest customers for luxury brands. The sector took a major hit from President Xi Jinping's anti-corruption campaign in 2012, but started seeing a strong recovery in late 2016. Sales surged around 20% on the year in 2017, to 142 billion yuan ($20.4 billion).

But that recovery is losing steam as sales of big-ticket items fall. Auto sales in China tumbled 11.6% in September, marking the third straight month of contraction. September's decline was also the biggest monthly fall in more than six years.

LVMH, the world's largest purveyor of luxury goods, said in October that sales growth of its Louis Vuitton products in China fell from the high teens to the midteens in the third-quarter from a year ago.

Italian high-end menswear maker Ermenegildo Zegna Group recently told Bloomberg that it will open fewer stores in China next year after observing weaker demand over the past few months.

"The [economic] slowdown and trade tension hurt consumer confidence and cause people to tighten their belts and postpone luxury spending," said Wang Dan, a Beijing-based analyst for the Economist Intelligence Unit, a British research group that is part of The Economist magazine.

Analysts said that the purchasing power of China's middle class over the years has been backed by investment gains on paper and easy credit, as opposed to genuine income growth.

"The stock market is bad right now and the property market is frozen," said Liao Qun, chief economist at China Citic Bank International. "It has become harder for people to cash out."

Over the past two years, rising property and stock prices have substantially boosted household wealth in urban China. About 95% of middle-class families own property, and they spend an average of 26.6% of their monthly income on financial investments and insurance, higher than the savings they put aside, according to a survey conducted by the Hong Kong Trade Development Council last year.

But this year, property and stock investments have become less reliable income generators. The Shanghai Composite Index lost almost 30% of its value since hitting a high in January, and the country's largest developers are slashing prices for some new apartments to speed up sales, offering discounts of as much as 30%.

At the same time, Beijing's crackdown on internet-based lending platforms also cut off the easy credit lines that many young Chinese relied on to buy luxury goods, cars and electronics, according to Andy Xie, an independent economist in Shanghai and former head of the Asia-Pacific economics team at investment bank Morgan Stanley.

He pointed to the boom and bust of peer-to-peer lending platforms that matched lenders and borrowers online, allowing borrowers to get credit on much looser standards than banks. The proliferation of the P2P platforms offered an easy way for consumers to buy high-end goods. Between the end of 2015 and October 2017, China's short-term consumer loans rose almost 60% to 6.6 trillion yuan, according to a Tsinghua University report.

"The bubbles will burst," he said.

Weak consumer confidence will put a brake on Beijing's drive to stimulate the economy through consumption when two other pillar industries -- exports and manufacturing -- are under greater pressure due to the trade war with the U.S.

China's State Council recently issued a document laying out goals including expanding the size of the middle-income group and nurturing high-end consumption. The aim of it was clearly to stimulate spending, but the document fell short of detailing how the goals would be achieved.

Beijing has also tried to encourage spending at home by cracking down on overseas expenditure. Tighter border checks on undeclared luxury goods have been in place since October, according to industry insiders. Ostensibly, this measure is to rein in daigou -- a practice of buying tax-free goods overseas and reselling them domestically at a profit, said Mariana Kou, a Hong Kong-based analyst at investment group CLSA. But it will also have an impact on big-spending travelers.

In 2017, mainland Chinese spent over $115 billion during more than 130 million overseas trips. About 75% of luxury consumption by Chinese nationals occurred outside the country, according to estimates by management consultancy Bain & Company.

"It's difficult to bring two LV bags to China now," Kou said.