China overtook South Africa to become the world’s largest gold producer in 2007 but a large part of the country is still unexplored, says "China Gold Report 2008".

As per the report, China has a strong position in gold industry in terms of consumption too. Gold demand in the country (Greater China) grew by around 24% in 2007, surpassing the US to become the world’s second largest market for gold jewellery.

This report analyzes the gold industry of China in context of global industry. The industry analysis has been done on the basis of the country’s economic stability, gold reserves, production, consumption level, and future growth prospects. It outlines the market trends, growth attractions, challenges and future prospects for the industry. The forecast given in this research study is based on a correlation between past market growth and growth of such base drivers as demand, production and consumption.

Key Research Findings

-China is expected to increase its annual gold output by around 7% to nearly 300 Metric Tons this year, which would see it keep its number one position in 2008 as well.

-Current gold consumption in the country is mainly centred in the low-end or middle-level jewellery products for the purpose of fashion and decoration. But changing allocation of financial assets will drive the growth of gold market in the country.

-Jewellery demand in Mainland China reached 302 Tons in the year 2007, overtaking the US and making China the world's second-largest retail jewellery market after India.

-Transformation in the gold industry of China is opening lucrative opportunities for foreign players.