Gold jewellery may shift to China putting jobs at stake
Updated: Apr 16, 2014 02:16:47pm
Mumbai, Apr 16 (KNN) Gold jewellery manufacturing will shift to China putting at risk jobs of millions of artisans and throw thousands of small entrepreneurs out of jobs if the Indian Government persists with the present curbs on gold imports, the World Gold Council (WGC) has cautioned.
A senior WGC official was quoted in the media as saying so after a major report published by the World Gold Council “China's gold market: progress and prospects” was released yesterday.
The report suggests that private sector demand for gold in China is set to increase 20 per cent from the current level of 1,132 tonnes (t) per year to at least 1,350t by 2017. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth.
The report examines the factors that have driven China’s rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s. It also highlights why despite this steep growth in demand, the market will continue to expand, irrespective of short term blips in the economy.
This is likely to have an impact on India if the government does not take steps to institutionalise bullion trade, the media report said.
The WGC official went on to say that India which has already lost its competitive edge over the neighbouring giant in many sectors is likely to follow suit in gold jewellery manufacturing too if the government continues with its restriction on gold imports.
He believes it is only a matter of time before domestic jewellers begin weighing the option of manufacturing in the neighbouring country, especially if China decides to set up a free trade zone for the industry in Shanghai to attract foreign investment in gold trade.
According to the latest WGC report, China is the largest consumer of gold and is among the largest producers of gold with 600 operating mines producing 437 tonnes last year.
Commenting on the report, Albert Cheng, Managing Director of the Far East at the World Gold Council said: “Since liberalisation of the gold market began in the late 1990s and the subsequent offering of gold bullion products by local commercial banks from 2004, we have witnessed astonishing increases in demand for gold from consumers across the country.
“The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further. The country is now at the centre of the global gold eco-system,” Cheng added.
“Whilst China faces important challenges as it seeks to sustain economic growth and liberalise its financial system, growth in personal incomes and the public’s pool of savings should support a medium term increase in the demand for gold, in both jewellery and investment,” he added.
In the meantime China has given licence to HSBC and ANZ banks to import gold and ensure supply at the free trade zone.
Under the circumstances, India will need to ease norms on bullion trade and relook its policy to boost bullion trade, the WGC official said. (KNN/ES)
A senior WGC official was quoted in the media as saying so after a major report published by the World Gold Council “China's gold market: progress and prospects” was released yesterday.
The report suggests that private sector demand for gold in China is set to increase 20 per cent from the current level of 1,132 tonnes (t) per year to at least 1,350t by 2017. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth.
The report examines the factors that have driven China’s rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s. It also highlights why despite this steep growth in demand, the market will continue to expand, irrespective of short term blips in the economy.
This is likely to have an impact on India if the government does not take steps to institutionalise bullion trade, the media report said.
The WGC official went on to say that India which has already lost its competitive edge over the neighbouring giant in many sectors is likely to follow suit in gold jewellery manufacturing too if the government continues with its restriction on gold imports.
He believes it is only a matter of time before domestic jewellers begin weighing the option of manufacturing in the neighbouring country, especially if China decides to set up a free trade zone for the industry in Shanghai to attract foreign investment in gold trade.
According to the latest WGC report, China is the largest consumer of gold and is among the largest producers of gold with 600 operating mines producing 437 tonnes last year.
Commenting on the report, Albert Cheng, Managing Director of the Far East at the World Gold Council said: “Since liberalisation of the gold market began in the late 1990s and the subsequent offering of gold bullion products by local commercial banks from 2004, we have witnessed astonishing increases in demand for gold from consumers across the country.
“The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further. The country is now at the centre of the global gold eco-system,” Cheng added.
“Whilst China faces important challenges as it seeks to sustain economic growth and liberalise its financial system, growth in personal incomes and the public’s pool of savings should support a medium term increase in the demand for gold, in both jewellery and investment,” he added.
In the meantime China has given licence to HSBC and ANZ banks to import gold and ensure supply at the free trade zone.
Under the circumstances, India will need to ease norms on bullion trade and relook its policy to boost bullion trade, the WGC official said. (KNN/ES)
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