According to Jan Skoyles, 2013 will be remembered by the gold market as the year of China, but the Asian giant’s domination, while quick hasn’t happened overnight.
LONDON (THE REAL ASSET COMPANY) – The year 2013 in the gold investment market will be remembered as the year of China, so we’ve produced a stunning infographic detailing China’s great golden rise to power.
In just a few months the world’s largest country will overtake India as the biggest consumer of gold and its gold market continues to break records.
A country that already mines over 400 tonnes of gold a year, China still demands more physical gold no matter the price. Between January and July this year the Shanghai Gold Exchange delivered more than 1,333 tonnes to gold investors.
In the last 100 years China’s gold mine productivity has climbed from just 4 tons of gold in 1949 to an expected 440 tons this year, none of which is exported. Hong Kong imports have been over 600 tonnes this year alone, but still more gold is demanded.
Whilst it may appear that China has exploded onto the gold scene this is by no means the case.
China’s ancient monetary history is well documented. They are the world’s oldest scientists when it comes to different forms of money, having being the first to experiment with paper money and different metallic standards. Therefore during an international financial crisis one would imagine that the country with the longest and most diverse monetary history would be the place to turn to for direction.
Global domination in less than a century?
Less than 100 years ago the Shanghai Gold Business Exchange was one of the biggest gold centres in the Far East. Since then gold has gone from being an almost illegal investment to a market that has become increasingly open in modern China.
Whilst the Western world works to keep the paper system upright, China’s experience with fiat money and its concomitant phenomena of debasement and inflation may mean that they are looking to diversify their monetary system. Their recent history certainly suggests as much, as they have been gradually opening themselves up to the world’s most precious marketplace.
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