Gold snake figures displayed at a jeweler's in Beijing. (Photo/CNS)
China's demand for gold increased 94% year-on-year last year and is expected to grow further as the country's economy has bottomed out and its exports and domestic demand grow, according to Commercial Times, our Chinese-language sister newspaper.
Mainland China imported 114,000kg of gold from Hong Kong in December last year, the highest amount traded in a month. The annual imported volume in 2012 also climbed to 834,000kg, showing a 94% year-on-year increase from the 431,200kg in 2011.
The increase in personal income was the main attribute to the significant growth in gold demand, said an analyst with the state-run Industrial and Commercial Bank of China. The demand may increase further as disposable incomes per capita in the urban area increased by 12.6% to 24,565 yuan (US$3,940) last year and China's economy rebounds.
China's demand for gold may dispel investor worries that gold prices may fall after the economic outlook brightens up. the World Gold Council has predicted that China may replace India as the largest gold consumer this year.
The Chinese government is also expected to increase its gold reserves as the country's demand for gold and economy increases and other countries are predicted to maintain low real interest rates, according to CITIC Newedge Futures.
The gold holdings of China as of the end of January this year have surpassed Japan, Russia and Switzerland to make the country the world's fifth largest gold holder, excluding international financial organizations such as IMF.