When trying to determine how well off someone in my area was, I had to look at their shoes because the type of clothing they wore didn't seem to correlate to their status the same way it does in the United States. In the US, we make a number of assumptions about someone if, say, they are wearing a suit on the street. In China, the peasants I could see working the fields from my patio were wearing business suits to go weeding. However, a good pair of shoes was still too expensive for the average person to own and the poorest people still wore homemade cloth shoes.
My theory on the lack of social stratification of clothing is economic. The perception of people in my province was that the province was improving. The most common illustration of this fact was that people couldn't afford shoes ten years ago, but now almost every peasant has shoes. With the influx of money for clothing and the influx of available cloths and styles, people are experiencing a fashion free-for-all. There isn't really a concept of clothing type besides traditional or modern. Older people wear traditional cloths and younger people wear more modern cloths.
The Chinese standard for "goodness" of clothing seems to be how western that clothing is, so a cheap western style suit is cooler than a high quality traditional outfit. Second best is an outfit from Hong Kong. The more expensive brands tend to use English phrases on the clothing (the Fun Jeans store, for instance, was one of my favorites). And there is indiscriminate use of western images. The three most popular western symbols on my students clothing were the Chicago Bulls, Disney characters, and the Playboy bunny head. As far as I know, no one knew what the bunny referred to, except that it was western.
I think the Chinese are rapidly developing a fashion sense, though. At the beginning of the year, my co-teacher would wear evening gowns to teach. I personally don't like to wear spaghetti straps to teach 3rd graders, but she thought it looked very sophisticated. Somewhere around midyear, one of the administrators decided that she wasn't allowed to wear them to work, anymore, so they had some sense of what professionals should wear to work. This also forced her to find other ways to feel sophisticated than evening gowns.