Gold has always held an important place in China as an investment and store of wealth. The high demand for gold jewelry in China in recent years is a reflection of the relaxing of laws relating to gold ownership and the growing middle class with money to spend on luxury items such as gold jewelry.
Some people believe that China is the country that will drive the price of gold and gold jewelry higher than ever seen before. Darius McDermott, managing director of Chelsea Financial Services, says rising demand for jewellery could be the key factor driving the gold price onwards. "In China, there are expected to be 200 million people joining the middle classes. Gold jewellery will be one of the things they buy." Read article.
In December 2002, the Chinese Government allowed the Chinese people to once again buy gold for the first time since 1949, when the Communist Party came to power. This decision has opened up the domestic market in China for the buying and selling or gold bullion and gold jewelry as an investment commodity.
In the first half of 2005, the retail sales volume of 1,000 of China's major gold, silver and jewelry companies increased by 13.9 percent, according to theminingnews.org.
Foreign Direct Investment has been permitted in gold jewelry retail. No permission is required to open shop unless gold is imported. The import duty on gold fell from 23.5 percent to 20 percent in 2005.
24 Karat Gold Jewelry
Gold Jewelry in China is mostly sold as 'chuk kam', which is virtually 24 karat gold jewelry. This is the traditional karatage used in gold jewelry and bought for ceremonial occasions along with jade. Gold jewelry is now also sold as 'K-gold', being 18 karat gold. K-gold was launched in 2003. Over half of K-gold jewelry is white gold jewelry which is very popular with the young urban chinese market.
History of Gold Jewelry in China
According to lapidaryjournal.com, "In the third and fourth centuries AD, gold became the preferred metal for hair ornaments in China. These ornaments were decorated with filigree, granulation, and precious stones. Necklaces were very rare in China before the seventh century AD."
Gold jewelry has always been seen as an investment by the Chinese. Communist China saw the regulation of chinese gold jewelry sales but this has now been reopened and gold jewelry is more popular than ever before.