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Chinese jewelry sales boost gold consumption with 12.2% increase through Q3

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(Kitco News) - Chinese jewelry companies reported a 12.2 percent year-on-year increase in retail sales of gold, silver, and other jewelry, reaching 247.2 billion yuan ($34.4 billion) between January and September, according to a report from China Daily.

The rate of growth nearly doubled China’s overall retail growth rate. “The growth rate…is far higher than the average growth of total retail sales — at 6.8 percent — across China,” said Ye Zhibin, president of the Gems & Jewelry Trade Association of China.

“Against a global economic slowdown and turbulent international trade environment, China’s jewelry industry performed with stability, potential, resilience as well as stamina,” Ye said.

The jewelry industry in the Hong Kong Special Administrative Region also saw standout performance during the last two years, with export-driven growth actually outpacing the mainland’s strong rate.

“Overall exports have recovered to the level seen before the COVID-19 pandemic, with the total value of precious jewelry exports reaching about 66.7 billion yuan in 2022, an 18 percent increase compared to 2019,” said Cheung King Yau, chairman of the Hong Kong Jewellery & Jade Manufacturers Association.

The first half of this year saw very strong growth. “[Hong Kong’s] overall export value of jewelry from January to June this year was 39.4 billion yuan, an increase of 13.3 percent over the same period last year,” Cheung said.

The China International Import Expo, which concluded earlier this month in Shanghai, was a significant support for burgeoning jewelry sales. “The excellent performance has also been reflected in international trade as the China International Import Expo…became one of the driving factors,” Ye said.

China’s jewelry trade deficit has persisted for years, but recent trends indicate a shift may be occurring.

“Based on data from the past few years, China has maintained a continuous deficit in international trade in jewelry for many years,” Ye said. “It is worth noting that in recent years, the growth in Europe and the United States has significantly slowed down, while the Association of Southeast Asian Nations region has become more active.”

The ASEAN region, in particular, has seen a surge in trade with China. “The total worth of gold, silver and jewelry products imported by China from the ASEAN region in 2022 was $5.89 billion, a year-on-year increase of 62.5 percent,” he said, “while exports were worth $1.53 billion, a year-on-year increase of 90 percent.”

Chinese domestic demand for gold has been very strong throughout 2023, and it has had a significant impact on the country’s precious metals markets. Recent months have seen China’s domestic gold prices spike well above international spot prices as the country’s wealthy and middle class have clamored to secure the value of their own savings.

The population’s appetite for gold was so great that the PBoC intervened in the market by banning banks from importing gold, which pushed the spread between the spot price of gold in Shanghai and in London to a record $121 per ounce in mid-September.

The Shanghai gold price has since pulled back from its highs, but it still trades slightly above global spot prices. Shanghai gold last traded at $2,002.12 per ounce and is up 1.05% on the session, while spot gold was trading at $2,001.02, up 1.17% at the time of writing.

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