The figures are remarkable, the pace of change even more so. But there is still enormous potential for future growth.
That potential is widely acknowledged, not least by the Chinese authorities. And they, along with others, recognise that the path to further expansion involves liberalisation, improved regulation and internationalisation.
Initial steps have already been taken but much more action is planned over the coming decade and beyond. This has implications in many areas.
In this edition of Gold Investor, we explore those implications and assess the outlook for China across a range of perspectives.
Professor Zhou, Associate Dean at the world-renowned Tsinghua University PBC School of Finance, considers how best to leverage past lessons as China develops its financial markets in a world characterised by widespread geopolitical tension.
Within China’s financial markets, the insurance industry now manages US$2 trillion (tn) of assets, following a decade of rapid growth. The Insurance Asset Management Association of China explains why this fast-growing sector might benefit from investing some of its US$2tn assets in gold.
We also examine ways in which stronger market infrastructure and improved regulation would boost confidence in China’s gold investment industry, following an in-depth report from one of China’s leading think-tanks, the Financial Research Institute of the Development Research Center of the State Council.
The China Gold Association echoes the need for more robust regulation, suggesting that the mining industry can become a prominent player on the international stage, if it becomes both more disciplined and more outward facing.
The “Belt and Road” initiative has become a symbol of China’s international ambition and its deepening relationship with emerging markets worldwide. Xiao Fu, Head of Commodity Markets’ Strategy at Bank of China International, considers progress to date and the considerable impact that this extensive project will have on the gold market.
Any comprehensive view of China’s gold market would not be complete without an analysis of its jewellery industry, the largest in the world by some margin. Chow Tai Fook, one of country’s most prominent retailers, believes prospects are bright but acknowledges that the industry has to make both structural and strategic changes to attract younger, affluent customers.
I have watched China develop at an extraordinary pace during my years as Chief Executive of the World Gold Council. Today, the focus of the gold market has shifted definitely from West to East with China at the forefront. It is increasingly taking a leadership position worldwide. This is reflected in the increased number of Chinese mining companies that are becoming members of the World Gold Council. To facilitate their active participation on the Board of the Council, we have created the China Chapter which is chaired by Mr Song, the Chairman of China Gold International Resources Corp Ltd and also of the China Gold Association. The China Chapter also provides a platform for China’s leading gold miners and market leaders to guide and engage in our programmes at the highest level.
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