Understanding The Gold Industry In China
To understand gold in China, one must understand its crucial role within Chinese society.The ownership of 24-karat gold is deeply embedded within this ancient culture — as a symbol of prosperity, as a vehicle for storing wealth and hedging inflation, and in its traditional role for weddings and other gift-giving celebrations.
As the third largest consumer item after the purchase of a home and automobile, the ownership of jewelry symbolizes ascent into the middle class.
For China's jewelry industry, this truly represents a golden era.
The Emergence Of A Billion Dollar Industry
In 2002, after nearly 20 years of state-controlled jewelry production, the manufacturing of gold jewelry was open to private ownership within China. What emerged was a highly fragmented industry, with Kingold becoming one of the largest manufactures of 24-karat gold jewelry.
Currently, this industry is experiencing the first serious stages of consolidation, with smaller players being squeezed out of the market by larger, more efficient competitors and Kingold Jewelry leading the way.
China's top 4 manufacturers were responsible for only 10% of industry revenue in a sector worth $6 billion in 2008.