An average Chinese city has about 100,000 dogs and gains about 10,000 per year, while large cities can have twice as many.
The Chinese capital, Beijing had more than 500,000 pet dogs in 2004, according to the China Animal Agriculture Association's National Kennel Club.
As China opened up and individual incomes soared, city dwellers are developing a liking for pets. Some people have been known to spend up to $217 on a luxury dog house or $72 dollars giving their dogs a fragrant bath, it said.
Pet owners in Beijing spend more than $60 million on their pets a year. In Shanghai, China's largest city, there seems to have a new pet shop open almost every week, it said.
According to report, pet sales and services such as medicine, hairdressing and food are also emerging industries. Experts predicted that the annual sale of pet food and necessities in the country might exceed $726 million by 2008.
They also predicted the market potential for the "pet economy" in China could reach a minimum of $1.82 billion.
Dogs and other pets are especially popular with older Chinese empty-nesters in cities where life revolves around family but a strict birth-control policy limits couples to just one child.