Vincent Yu  /  AP
A female visitor, right, walks by mannequins dressed in sexy underwear at a booth at the fourth annual Asia Adult Expo in Macau, China.
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updated 8/19/2011 1:42:21 PM ET 2011-08-19T17:42:21

Sexy lingerie, adult costumes, inflatable dolls and much more are on display at an adult industry trade fair in the Chinese territory of Macau that shows how China's growing influence has spread even to the bedroom.

The fourth annual Asia Adult Expo kicked off Friday with companies showing off sexy products aimed at China's growing middle class. The adult industry is looking to tap mainland China and Asian markets amid the downturn in the U.S. and Europe.

Show exhibitors said many Chinese now have more open-minded views about sex, which is driving demand for their products. The expo's organizers said they plan to launch similar fairs later this year in other parts of China, which also churns out nearly three quarters of the world's sex toys.

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Estimates of the size of the adult industry in China are hard to come by. But the state-run China Daily newspaper said in a report last year that China produces 70 percent of the world's sex toys, making it the world's biggest producer. The industry, with more than 1,000 manufacturers, is worth about $2 billion annually, it said.

"The standard of living in China is rising and people want to upgrade their lifestyle so the market needs these products," said Bo Chen, as he sat next to samples of his company's main product, a lifelike and anatomically correct female sex doll made of rubbery, flesh-like material that sells for 16,000 yuan ($2,500).

Chen owned a chemical factory in China's Jiangsu province but three years ago he decided to start making sex toys because he sensed there was an opportunity.

Chen, president of Jurong Outlook Toys & Gifts Manufacturing Co., said he and several friends pooled their money to start the business.

He is hoping to meet potential customers among the 2,500 trade visitors and 30,000 members of the general public expected at the Macau fair. It was his first visit to the annual show, attended by 80 companies from 13 countries.

Chen's case is not that unusual, said Kenny Lo, chief executive of show organizer Vertical Expo. Many Chinese manufacturers realized they could tweak their product lines to make adult goods with minimal investment to reap bigger profits. It's not such a big step for underwear makers to make sexy lingerie and it's easy for companies making regular toys to switch to sex toys, he said.

The United States and Europe have traditionally been the biggest markets for the adult industry. But slumping economies there are curtailing growth while competition and low profit margins are also making life hard for companies, said Lo.

In Asia the market is much more undeveloped so "there is much potential for growth," Lo said. Adult product manufacturers have told him that in America and Europe, "it's a very tough time right now but in mainland China and Asia, it's good."

Lo said demand from suppliers has prompted his Hong Kong-based company to start branching out with new fairs in other parts of China, starting with a show in October in Shenzhen, just across the border from Hong Kong. It will be followed by shows in Fuzhou on China's eastern coast and Qingdao in the northeast. It's also eyeing shows in Taiwan and Singapore.

Other emerging markets are also sources of growth. Renata Bertacini came all the way from Sao Paulo, Brazil, to source items for her boutique and online shop Mimosexy.

"I came to find new products to take to Brazil, new things to import from China," she said. Many of the products were items she already stocks but at half the price that her middlemen back home charge, she can save money by buying them directly.

At the expo, vibrators of all shapes and colors, condoms, lubricants and blowup male and female dolls were on display. One company was selling coffee tables made of erotic statues.

"The mainland Chinese, they are very open to these sexual things," said Lo. "It's not something that's a taboo" anymore.

It's a sign of how rapid social changes in China are driving new businesses. Several decades ago, men and women were strictly segregated in many parts of life and most people wore drab clothing that revealed little. Nowadays, shops selling sexual aids are common in many cities, and pornography, while officially banned, is commonly found on the Internet.

China's booming economy, the world's second biggest, is in large part driving those changes.

"A lot of these people have first-generation money. Before when it was old money, it was shameful to show it," said Zach Goode, a sales manager at Electric Eel, which holds the global license to Hustler lingerie.

Now, China's nouveau riche don't just want BMWs and Gucci, "they want to express themselves and have sexy shoes and lingerie and have fun with it. They're not as repressed as the last generation was."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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