Interview About Chinese Gold Consumption: Why It's Expected To Keep Rising

The Seeking Alpha interview, with mainland Chinese gold analyst Eily Ong, has this as its nub: mainland Chinese growth in demand is keeping pace with GDP expansion, and shows no sign of stopping.

Gold demand has grown in China at an average rate of 13 percent per annum. During the past decade, the Chinese gold mining producers stepped up production by 84 percent. So Chinese demand growth has continued to outpace domestic production capacity, and we've seen this since 1992.

But China is still ranked No. 2 behind India in terms of demand. And although we see the acceleration in the demand growth, the country still has one of the lowest gold consumption intensity rates, if you compare it to Western economies, or even countries with similar gold cultures, like Taiwan or South Korea....

[W]e had this deregulation in the Chinese gold market; I think people aren't really aware that the regulations were only lifted less than a decade ago. So, yes, we've seen the per capita consumption level growing: From 2002, the per capita consumption was at 0.17 grams, and this has almost doubled to 0.33 grams in 2009. But it's still one of the lowest in the world. So they are catching up in terms of their Western counterparts.

Ong expects holding rates to catch up with those other countries, which would make mainland China the biggest gold consumer.