Chinese demand for gold surpasses world's production. (Photo : Reuters)
The Year of the Ram highlights how large of a market China is for gold. Astoundingly, Chinese people consume more gold than what the world produces and the demand is likely to balloon further as the number of people who can afford gold increases.
According to Frank Holmes of Value Walk, China is the country with the largest gold demand. This is remarkable for two points: First, China has low production rate of gold, even compared to Singapore and Taiwan. Second, the country's demand for gold has now surpassed the world's production.
China and India both lead the world in the gold demand, but the demand from China is likely to increase further as more Chinese people move up the socioeconomic ladder.
It is predicted that in the next five years, middle-class people in China would increase by 200 million. This could boost gold bullion and jewellery demand further.
Chinese people are also likely to become top demanders of tourism services. When it comes to overseas spending, Chinese travelers have already overtaken American tourists at the number one spot. Chinese travelers often travel to the U.S., with each trip per person averaging $6,000 to $7,200.
The number of Chinese tourists going to the U.S. is likely to increase with new visa policy allowing Chinese citizens multiple entries for over a 10-year period. Before this new policy, Chinese citizens were only granted one-year, multiple entry visas.
Tourist-related firms in both the U.S. and China such as airlines, retailers and theme parks are bound to benefit from the rising Chinese middle-class.
