IMPORTS of Gold Bullion to China from Hong Kong – widely regarded as a proxy for overall gold imports – fell in January from the previous month, figures published this week by Hong Kong's government show.
China imported 32.9 tonnes of gold from Hong Kong in the first month of 2012 – a 15% drop from December, but four times more than the previous month.
Last year saw Chinese gold imports from Hong Kong hit a record at nearly 428 tonnes, triple the 2010 volume. Much of the 2011 surge came in October and November, which saw back-to-back records set.
China was the world's biggest consumer of Gold Bullion in the fourth quarter of last year – having been number two behind India for several quarters before that – according to World Gold Council data.
Despite the strong demand reported in Q4, though, China's Gold Bullion imports for the quarter, when added to the period's officially reported domestic Gold Mining output, was not all accounted for by reported gold demand.
This led to recent speculation of gold purchases by China's central bank accounting for the difference. An alternative explanation – put forward by BullionVault in this gold weekly review video last month – is that dealers were Buying Gold in large quantities in order to stockpile ahead of Chinese Lunar New year.
"Retailers in Beijing and Shanghai have been telling us that January and February sales were fantastic, and completely cleared out the inventory they had built up," says Albert Cheng, managing director Far East at the World Gold Council, quoted by the Financial Times.
China's total 2011 gold demand totaled 770 tonnes, the latest World Gold Council figures show, an increase of 275% since 2001. Over the same period, China's annual economic growth rate has averaged 10%, according to International Monetary Fund estimates.
At this week's National People's Congress however, Chinese premier Wen Jiabao announced that the official growth target has been cut from 8% to 7.5%.
Chinese steel demand growth meantime could slow from 8% a year to 4% a year, Beijing-based industry body the China Iron & Steel Association warned this week.
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