BEIJING (Commodity Online): China, which is emerging as the leader in gold consumption almost beating Indian for the top slot, now eyeing Dubai to boost its yellow metal trade.
In an apparent bid to win the numero uno position in gold consumption, China has started exploring opportunities in Dubai.
China’s efforts bore fruit when the DMCC participated in the Asia Gold Focus 2009 Conference in Guangzhou, China, where investment strategies for the Dubai gold market was highlighted.
At the meet, it was observed that Chinese gold and jewellery manufacturers are increasingly eager to work closely with Dubai-based companies.
The conference highlighted several important aspects of the potential role of China in the international gold market —in 2008 China was the world’s largest gold producer, second-largest consumer and fifth-largest holder of gold reserves.
During the same period, Chinese per capita gold consumption grew by eight per cent at a time when few international markets registered any increase at all.
Yet per capita gold consumption among Chinese consumers remains extremely low by global standards at just 0.2 gm per person. This compares to the world average of 1.3 gm per person and 19.6 gm per person in the UAE, one of the most vibrant international markets for the precious metal.
In emirates also, jewellers have recognised the importance of the Chinese market at a time of increased volatility in the global economy.
Further strengthening ties between these two growth regions will clearly benefit both sides and the opportunities in the gold trade are especially compelling.
The two countries plan a cost-effective manufacturing base for jewellery manufacturing in China; providing a one-stop-shop for imports, customs clearance and secure transportation from and to Panyu to other parts of China; as well as extending reciprocal arrangements between DMCC registered companies and companies registered with the key Gold Associations of China.
The aim of the Chinese gold market was to develop from a commodity market to a financial market, from a spot market to a derivative market, and from a domestic market to an international market.
