Chinese buying gold like 'purchasing vegetables'
Mainland Chinese are “buying gold as if they are purchasing vegetables,” reported the Hong Kong Standard.
In fact China and India together now account for 63% of the world’s gold demand or $16 billion, according to statistics from the World Gold Council.
China jewelry demand also reached a new quarterly record of 143 tons, up 21% in the first quarter of 2011 compared to Q1 2010, the Council also reported.
Many Chinese, however, buy jewellery and other luxury goods overseas in order to avoid the high import duty imposed on the mainland.
The state could benefit by lowering tariffs on luxury goods, a move that is likely, according to a Ministry of Commerce official in Beijing.
If tariffs aren’t adjusted downward, “people will buy these goods overseas and help other countries' consumption," Zhang Guoqing, the official, was quoted as saying.
Billions of yuan now going overseas could remain in the country if tariffs are lowered, he added.
Officials in different ministries are debating the tariff issue in the press. The state run China Daily recently reported the opposing positions of the Ministry of Commerce and the Ministry of Finance.
If Beijing does decide to cut tariffs, Hong Kong jewellery retailers could be negatively affected, the Standard noted.
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