Video games aren't the only luxury the Chinese government is cracking down on

Growing concern China could soon launch a crackdown on the country's wealthy elite has seen share prices for some of the world's biggest luxury brands take a tumble.

President Xi Jinping in August delivered a speech in which he talked about the so-called communist nation's "common prosperity", saying tackling growing inequality would improve people's sense of "gain, happiness and security", the South China Morning Post reported.

It's not quite clear how China plans to do that. Chinese incomes have skyrocketed in the past 40 years since opening its economy, with GDP per capita rising from US$300 a year in the late 1970s to US$8400 now - doubling in the past decade. 

Like other nations with market economies, the gains haven't been equal - the Wall Street Journal reporting last month experts estimating there is an elite of around 110,000 people whose spending accounts for a quarter of all luxury brand sales in the country of 1.4 billion. 

After Xi's speech, a combined value of more than US$70 billion was wiped off four of Europe's biggest brands - Louis Vuitton, Kering, Hermès and Richemont, the Journal reported.

"China's been a huge wealth engine for luxury names," Milford Asset Management senior analyst Stephanie Batchelor told The AM Show on Thursday. 

She said China's likely to pursue "common prosperity" through higher taxes on the wealthy. 

"That will reduce the disposable income they have to spend on luxury items. It's also in the context of a broader backlash against excessive consumption and also against wealth-flaunting on social media. All of that combined has negatively impacted those luxury companies."

And not just luxury companies. China has also recently banned for-profit tutoring, forcing providers to register as non-profits.

"They effectively wiped out a $100 billion industry in a matter of days."

And this week the state announced a crackdown on "spiritual opium" - better known as video games

"The regulatory crackdown on China has actually been very broad-based," said Batchelor. "The technology sector has been a target because the Government is trying to rein in the power of some of those tech companies - whether it's through fines, blocking acquisitions, blocking IPOs, even pulling apps from app stores…

"It just shows the power the Chinese Government has on private industry."