China could see gold imports via Hong Kong surge by 50% this year, as investors shy away from domestic stock and property markets that are still reeling from an ongoing deleveraging drive.
The Hong Kong-based Chinese Gold and Silver Exchange Society expects China to import 1 million kg of gold from Hong Kong in 2017, as compared to net purchases of 647,000 kg last year.
Speaking to Bloomberg, CGSES president Haywood Cheung said that Chinese investors were turning to bullion amidst concerns about their limited domestic investment options.
“People are looking to other means to invest, a safe haven to protect their yuan because of the depreciation, so everybody starts to look for safe-haven products.”
Local consumption saw an increase of 15% during the first quarter of 2017. While jewellery purchase saw a mere 1.4% gain, sales of bars of investment purposes surged by over 60%.
In response to rising demand CGSEC plans to build a bonded warehouse in Shenzhen’s Qianhai which will be capable of harbouring 1.5 million kg of gold upon completion within the next several year.
CGSEC is already working on a temporary warehouse which will enter service by the end of 2017, and hold between 50,000 to 100,000 kg of gold.