Chinese gold consumption will double over the next decade and rising demand could exhaust the nation's gold mining reserves by 2016, according to a report from the World Gold Council (WGC).
Last year, China's gold consumption was worth more than $14bn (£9.3bn), equivalent to 11 per cent of global demand. The WGC is predicting that the country's demand will rise to $29bn by 2020.
The report said: "China has an insatiable appetite for gold, which looks likely to continue in an environment where domestic mine-supply lags behind demand."
Demand for gold in China has risen at an average rate of 13 per cent per year since 2005. Approximately 50 per cent of the gold is bought for jewellery, while another 30 per cent is for investment. Marcus Grubb, the managing director of investment at the WGC, said yesterday: "Now one of the world's largest economies, China has already rapidly become a prominent gold market. However, our analysis confirms that significant untapped growth potential exists in the Chinese gold market."
The report also calculated that, if gold were consumed in China at the same per capita rate as in India, Hong Kong or Saudi Arabia, annual Chinese demand could increase by between 100 and 4,000 tonnes in the jewellery sector alone.
The production of Chinese gold mines has been stepped up by 84 per cent since the millennium, but the country's known reserves account for just 4 per cent of total known reserves globally.
Assuming these figures are correct, the WGC estimates China that could exhaust its known gold reserves in six years from now.Reuse content