Chinese ditching gold for platinum
While more are veering towards Western fashion tastes, gold bullion as a form of investment is still a thriving market
BEIJING - Pure gold and jade are out for China's affluent crowd. Instead, they are shopping for platinum, gold and diamond jewellery.
Jewellery market worth $21b
BEIJING - Jewellery is a billion-yuan business in China.
According to a recent survey, 80 per cent of respondents said they bought jewellery to markweddings and birthdays every year.
The ''wedding market'' alone is a huge one. Close to 4 million urbanites tie the knot each year and in the major cities, couples spend an average of 5,800 yuan (S$1,200) on wedding rings.
Mr Hu Songlin, general manager of Shard Box Store, a Beijing jewellery store, estimated that the average Chinese consumer could afford to spend 7,000 to 8,000 yuan for a ring; white collared workers could easily fork out 15,000 yuan and the sky was the limit for the nouveau riche.
Over the past 10 years, the Chinese jewellery sector has seen a fivefold increase from 20 billion yuan in 1991 to over 100 billion yuan this year. Chinese bought 213 tonnes of gold and US$1.1 billion (S$1.9 billion) worth of diamonds last year. It remains the world's biggest consumer of jade.
David Hsieh
Last year, China imported 40 tonnes of platinum, more than half of the world's supply, for jewellery and other industrial uses, according to industry sources.
Traditionally, well-heeled Chinese have preferred bracelets and necklaces made from pure gold and jade.
Owing to backward smelting techniques, ornament gold contains small amounts of copper that oxidise to produce an orange hue.
Traditional gold jewellery are often also poorly crafted by modern standards and cannot withstand the day-to-day wear and tear.
With the rapid opening up of China in the past decade, increasingly sophisticated Chinese consumers have become exposed to beautifully designed and well-crafted jewellery from abroad, that retain their lustre even after many years of use.
The Chinese are also attracted to platinum and 14K or 18K gold rings studded with diamonds or other precious and semi-precious stones.
A clerk at Guiyou Department Store in east Beijing said:
'Customers buy platinum for the value. They buy 14K and 18K gold jewellery for the design and for fashion. Now, even farmers come in to buy platinum and low-carat gold.'
At Guiyou, platinum rings and necklaces cost 198 yuan (S$40) per gram and 14K and 18K jewellery items are priced according to individual pieces.
Mr Shi Hongjue, vice-secretary-general of the Gemmological Association of China, said it was the high quality of Western jewellery that appealed to the Chinese.
'The romanticism and artistry reflected in modern Western jewellery appeals to Chinese consumers.
'Traditional Chinese jewellery no longer satisfies the changing taste of these consumers,' he told The Straits Times.
Mr Hu Songlin, general manager of Shard Box Store, a jewellery store in Beijing, said buying diamonds was also considered a sound investment.
'Diamonds maintain and increase in value.
'Nowadays, the average Chinese have more money to spend so buying two or three carats is not beyond their reach,' he said.
Like gold, the demand for jade - especially feicui or green jade and white jade - has also waned.
Low quality and fake jade, which has flooded the market, has deterred consumers from spending huge sums on expensive jade.
The problem is aggravated by the lack of authoritative authentication of the quality of jade.
Although pure gold in the form of jewellery is losing its popularity in China, it has found a new and potentially huge market - in the form of gold bullion for investment purposes.
After a 50-year ban on trading and retail sale, the Shanghai Gold Exchange opened its doors in October this year.
More than 10 tonnes of gold bullion, valued at 880 million yuan, have been traded.
Last month alone, about six tonnes were traded.
Gold ingots ranging from 10 g to 500 g, which went on sale at major department stores nationwide on Wednesday, are selling like hot cakes.
At the Guiyou store, the first batch of 200 ingots, priced at 92 yuan per g, were snapped up by noon with the second batch also selling fast.
On Wednesday alone, four department stores in Beijing sold a total of more than 200 kg of gold bullion worth 18 million yuan. |
