After seeing Beijing's Bookworm making a profit, Pearson opened a new Bookworm in Chengdu, capital of southwest China's Sichuan Province, just three months ago.

"It has already got a couple hundred members," Pearson said.

But The Bookworm isn't just about books. It's about vibes. There are no screaming white lights when you walk in, like in the new bookstore on Baiwanzhuang Road in Xicheng District, Beijing. It's cool and mellow, where foreigners can chill out from their Chinese lives.

That's what Sakarapani likes.

"It gives that feeling of, ok, when you need a break just from general hectic life being in Beijing, it's a great place to go," she said.

But neither Sakarapani, her Capital Club nor The Bookworm is making a dent in the attitudes of serious marketers.

Who cares?

"I haven't done any research into this area," said Lu Yilin, a marketing professor with Renmin University of China. "Neither do I know any of my colleagues who have done it."

Ditto for Yan Xuemei, Vice President of All China Marketing Research.

"I'm not familiar with the foreigners' consumption here in China," said Yan. "They aren't the major purchasing power in China. We haven't received any request from our clients to do a survey on them. Just think, how many companies are actually targeting only at the foreigners in this country?"

Good point.

Sakarapani acknowledged that the Capital Club caters to local Chinese as well as foreigners. And certainly local Chinese hit up The Bookworm for alternatives to Beijing Review to learn proper English.

But that doesn't mean the expat market should be ignored.

"It is a lucrative market," Sakarapani said. Although she referred us to the general manager for questions on profitability, he wasn't in as of press time.

What Sakarapani did say is that the Capital Club does have events only for foreigners. The club also is preparing heavily for foreigners as the Beijing 2008 Summer Olympics is drawing near, when it expects foreign members to entertain large numbers of out-of-town friends and colleagues. Renovating the Western dining room is in the works.

Rich, taxed Americans

Meanwhile, what research we do have about expats suggests the majority are Americans-about 110,000-half of whom live in Beijing and Shanghai. That's according to Newsweek's reporting. Original expat market research was proving elusive, as our marketing experts suggested.

But if that data is true, anyone interested in marketing to expats would almost certainly have to consider the American contingent and their spending habits.

That could be bad news.

In May, the U.S. Congress levied new taxes on U.S. citizens working abroad.

For many Americans overseas, their taxable income is now being taxed at higher rates and certain deductions are more prohibitive.

"We will have less disposable income at the end of the day given the increase in tax," said Kevin Dauphinee, a 58-year-old independent broadcasting consultant living and working in Beijing. "It makes it more difficult for Americans to live abroad."

So will they clam up, shutting their pocketbooks to any businesses that happen to offer services for them?

Dauphinee wouldn't go that far.

"It's not that much of an imposition," he said. "Is that going to make us not purchase a new set of bed covers? Not buy an office chair? No, I think we will in fact make those investments."

Dauphinee isn't screening out the big-ticket items either. A 2007 trip to Thailand for vacation is planned with his wife, for instance.

In some ways, the new tax sheds light on the breath of disposable income of Americans like Dauphinee. The only Americans burdened by higher taxable income rates would be those making more than $82,400. Income under that amount is excluded from taxation for American expats.

And let's face it, relatively speaking, those making that kind of money in China must be considered wealthy and able to spend.

So unless the widgets you're selling to foreigners in Beijing happen to be yachts, the expat consumer market might be one to consider in the final bottom line analysis in 2007.