Hi Bocor,
Yes, but more importantly there are no monetary gold/silver available for sale; though I have seen folks in possession of old (pre-1949) monetary gold/silver tael (dumpling shaped ingot used to back Imperial and private paper money and bills of exchange).
Peoples Bank of China (PBOC - central bank) sets the price of gold for all wholesale transactions between mines and jewelry manufacturers. Experimental gold exchange already opened and operational, but only for wholesale.
Retail monetary gold should open within 36 months, per WTO-driven impetus, and leading up to eventual Yuan convertibility.
Silver trading on Silver Exchange is free, and for wholesale only (I believe), Silver price in China is 10-12% over international price. I have not seen monetary silver on market. I believe the issue is 'ease of storage'.
So, folks buy silver, gold and platinum jewelry. China is now the leading importer of platinum, ahead of Japan, accounting for 1 mm of 3.5-4 mm of annual new extraction. Difference being a portion of Japan bound platinum is for trading purpose (bars, coins) and all of China's import gets turned into jewelry.
The future is bright:0)
Chugs, Jay
Old news, but still relevant (P.S. the difference between annual world extraction and use, 3.5 mm oz vs 5.5 mm oz is made up by unhoarding, and now IMPAY and AAPTY has upped their extraction by about 1.5 mm oz, more or less)
ultrachina.com
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Market Reports & Surveys
China Will Become the Key Platinum Sales Market
UltraChina.com (08/11/2000)
China will soon surpass Japan as the world's most important sales market for platinum. Starting from scratch, it has become the largest consumer of the metal in less than five years.
South Africa's Financial Post reported recently that the Chinese platinum demand had made a huge leap from 220,000 ounces in 1996 to 950,000 ounces last year, due to its strong culture and economic factors. If this demand continued to increase, it said, China may replace Japan as the world's most important platinum ornaments consumer.
Johnson Matthey, a metal dealer, explained that the demand for platinum ornaments in Japan decreased from 1.39 million ounces in 1997 to 1.29 million ounces in 1998 - although it did rise again last year to 1.32 million ounces. In 1999, China and Japan consumed 2.27 million ounces of platinum each, together accounting for 40% of the 5.60 million ounces consumed worldwide.
Platinum producers, through the International Platinum Association, promote and support China's platinum ornament consumption. But last year, some platinum dealers were doubtful about how long the current rate of increase could be sustained. (The platinum consumption in 1999 rose 53% more than in 1998.)
The key issue is to determine what impact a dramatic rise in the price in platinum would have on trade. The conventional wisdom holds that the Chinese market is more price-sensitive than the Japanese market.
A delegation organized by Yinpajin Platinum and the International Platinum Association visited China this May and concluded that these worries were unfounded. Although the price of platinum increased from US$400 per ounce in 1999 to US$550 per ounce currently, Chinese demand has continued to soar.
A Hong Kong platinum producer and a Shanghai retailer said the sales volume of the first quarter increased from 10% to 100% of last year's. Some retailers say sales would be remarkably better if a larger selling stock were available. It seems some platinum ornament producers have reduced production because they are worried that profits will drop and the ornaments in stock will increase. A large quantity of jewelry and ornaments are consigned for sale on commission while the producers undertake the entire risk and pay the commissions to the retailers. Generally, the retailers are large department stores with good credit.
Platinum ornament producers in China are the most concerned about prices, as a price fluctuation would affect 30% of their profits. An increasing number of urban consumers appreciate the pure white European and Japanese style while desiring to break old-style tradition - but high quality - of gold ornaments.
Consumer incomes have increased in line with the rate of economic increase. Reports say that this rate has been rising from 7.1% in 1999 to 7.5% in 2000. The International Platinum Association spent US$2 million to promote the sales of platinum ornaments last year. Therefore, sales should rise 20%.
Sales promotion activities will concentrate on several large cities, like Shanghai, Beijing, Hangzhou, Dalian, Shenyang, and some second-tier central cities, like Wuhan, Chengdu and Chongqing. However, most salaries are low. The monthly salary of people 20-40 years old in large cities is 1,000 to 1,500 yuan while only 800 to 1,000 Yuan in the second-tier cities.
Shanghai is especially conspicuous in China's economic takeoff and so the International Platinum Association is initiating a marketing promotion project there in particular.
The profits and incoming investments have contributed to the rapid increase in the number of both consumers and retailers. Compared to commercial centers in other large world cities, Shanghai on equal footing and consumer appreciation of ornaments there is as good as in Hong Kong. The consumption concept is very important. Platinum ornament producers target the middle class, who follow world fashions while also desiring to keep Chinese traditions in purchasing precious metals as a form of investment. Analysis from KC Ho, the vice president of the Hong Kong Precious Metals Trade, says that from the traditional point of view, Chinese people would usually buy 24k gold ornaments - the value of the investment being more important than the design. Usually, the gold ornaments are preserved rather than worn.
However, some young people with low salaries like to buy the second class ornaments, which contain only 3g to 7g of platinum while the other group of wealthy consumers hopes to buy the new style of platinum ornaments. Consequently, some Hong Kong businessmen have opened jewelry shops in Shenzhen.
(By Zhong He)
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