Dubai, China Explore Opportunities to Increase Gold Trade
DUBAI — In line with increasingly strong trade ties between Dubai and China, the emirate and the People’s Republic are actively exploring opportunities to enhance cooperation in the gold trade, according to senior executives at DMCC.
Following DMCC’s participation at the Asia Gold Focus 2009 Conference in Guangzhou, China, where investment strategies for the Dubai gold market was highlighted, it was observed that Chinese gold and jewellery manufacturers are increasingly eager to work closely with Dubai-based companies.
The conference highlighted several important aspects of the potential role of China in the international gold market — for example, in 2008 China was the world’s largest gold producer, second-largest consumer and fifth-largest holder of gold reserves.
During the same period, Chinese per capita gold consumption grew by eight per cent at a time when few international markets registered any increase at all. Yet per capita gold consumption among Chinese consumers remains extremely low by global standards at just 0.2 grammes per person. This compares to the world average of 1.3 grammes per person and 19.6 grammes per person in the UAE, one of the most vibrant international markets for the precious metal.
“Chinese gold and jewellery companies increasingly see Dubai as a global benchmark,” said Dr. David Rutledge, Chief Executive Officer of DMCC. “Likewise, here in the emirate, we recognise the importance of the Chinese market at a time of increased volatility in the global economy, including in the commodities sector. Further strengthening ties between these two growth regions will clearly benefit both sides and the opportunities in the gold trade are especially compelling.”
He added that Chinese trade sees specific opportunities to partner with Dubai-based companies.
This includes a cost effective manufacturing base for jewellery manufacturing in China; providing a one-stop-shop for imports, customs clearance and secure transportation from and to Panyu to other parts of China; as well as extending reciprocal arrangements between DMCC registered companies and companies registered with the key Gold Associations of China.
Following his visit to Guangzhou, Harendra Kailath, Director for Gold at DMCC, highlighted that his discussions with many Chinese companies have been encouraging.
“Several Chinese gold refineries have expressed interest in applying for the Dubai Good Delivery standard. This standard, specifically designed for small gold bars fully and complements the London Good delivery standard for large 400 ounce bars,” he added.
At the Asia Gold Focus 2009, speakers also referred to the vision articulated by Zhou Xianchuan, Governor of the People’s Bank of China who said that “The aim of the Chinese gold market was to develop from a commodity market to a financial market, from a spot market to a derivative market, and from a domestic market to an international market.”
This vision set out by the government has proved to be a driving factor in the country’s outreach for partnerships with major commodity hubs of the world. — email@example.com
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