Tsuen Wan International: China’s gold demand set to increase by 25% in three years.

May 26, 2011 - PRLog -- The head of China National Gold Group, the country’s largest state-owned gold miner has told Tsuen Wan International that gold demand could rise by over 22% in the next three years, signaling room for a strong increase in imports.

Gold production is expected to reach 400 tonnes by 2014, an increase of almost 19% from 2010, but consumption is set to climb by around a quarter to 700 tonnes, Sun Zhaoxue, president of the group, informed Tsuen Wan International on the sidelines of a conference in Shanghai.
"I'm very optimistic about the future of China's gold market," Sun said.


The country turned out 340 tonnes of gold last year and investors locally bought 571.5 tonnes, government data revealed. The difference of 231.5 tonnes was made up by either imports or sales of existing stocks.


The ratio of gold imports is unavailable as China doesn’t regularly divulge gold-trade figures and seldom comments on its reserves.


China has undergone a significant increase in the demand for gold and silver in the past six months as investors look to precious metals as a hedge against the volatile currency and equity markets.

India remains the globe’s biggest gold buyer, but China is rapidly catching up and from a low base with room to grow quickly as income increases, Sun said, noting gold buying per capita stood at just 4 grams, much lower than other industrialised nations.


Last month the Shanghai Gold Exchange, China's only specialty precious metals exchange, began a trial for over-the-counter trading, offering an easier tool for institutional clients to trade large quantities of gold.

Sun told Tsuen Wan International that Beijing's move to consolidate the gold mining sector, improve technology and encourage exploration at depths exceeding 1,000 metres would combine to advance the country's underground reserves and output over the coming years.

The country’s gold output in the first quarter of 2011 totalled 73.4 tonnes, up 4.6% year on year according to the Ministry of Industry and Information Technology.

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