January 28, 2025 • 13 mins
Shuibei, in southern China, is home to one of the world's biggest retail markets for gold. Over the past year, it's seen a boom in demand for the jewelry, sold by thousands of stallholders, as the Chinese property crisis and slowing economy spurred a flight into gold. So much so that Chinese consumers helped propel the global gold price to record highs in 2024.
On today's Big Take Asia podcast, K. Oanh Ha talks to Bloomberg's Chongjing Li about the enduring appeal of the precious metal in China, and what lies ahead.
Read more: The Epicenter of China’s Gold Craze Is a Former Fishing Village
Watch, from Bloomberg Originals: What Gold’s Crazy Run Says About China
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
At the center of Shanzhen, a city in southern China
not too far from Hong Kong, lies a special little
district called Choi Bai. Choi Bay is known as a
place to go if you're looking to buy one specific thing.
Speaker 1 (00:30):
Tribe is among the largest gold retail markets in the world,
and definitely the largest in China by volume of gold.
Speaker 2 (00:37):
That's Bloomberg reporter Chong Jingle based in Hong Kong.
Speaker 1 (00:41):
So if you go to the Shribune market there are
like more than ten thousand business clustered across several city blocks.
You will be greeted by endless rows of glittering jury
that would make your head spin, and at almost any
time of the day, the place always buzzes with crowds
of customers eagling, browsing, selecting, and snapping up their favorite pieces.
Speaker 2 (01:11):
The popularity of this market has been fueled in part
by live streamers who hog their gold on doin Chinese TikTok.
(01:31):
And while gold has always been a popular commodity in China,
the investment demand for the precious metal is attracting attentionately.
Speaker 1 (01:39):
With the slowdown in the Chinese economy, people have been
shrinking their spending on all kinds of goods. Joey purchases
like diamonds have really taken a hit as Chinese buis
have tightened their belts, But the allure of gold as
the safe place to park one's cash remains, and we
are seeing consumers showing percent and demands for investment products
(02:02):
like gold bars and coins as a way to safeguard wealth.
Speaker 2 (02:08):
Welcome to the Big Take Asia from Bloomberg News. I'm wanh.
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoons and
businesses that drive this ever shifting region. Today on the
show China's Gold Rush, Why are Chinese consumers so keen
on the precious metal, what's driving the dizzying rally in
(02:32):
gold and how long will it last? Gold is popular
all over the world, but in China the commodity is
appreciated on a whole other level. The Chinese love gold.
It's not just a symbol of beauty, luck and fortune.
(02:54):
In China, gold often means something special and marks important milestones.
Speaker 1 (03:00):
So when you're born, it's typical for others to give
you golden bracelets for your wrists and ankles, and when
you get married, you door yourself in gold. In Hong Kong,
where I'm based, during the wedding banquet, brides will be
covered in gold ornaments. I'm talking about gold bengals stacked
up to the elbows. These oversized twenty four cara gold
(03:24):
necklace are usually in the shape of pigs, which symbolizes well,
prosperity and fertility. And gold is also just the kind
of jury that you can pass on for generations.
Speaker 2 (03:34):
Cho Jing, who was born in mainland China, grew up
understanding gold special role not just in Chinese culture, but
also for her family.
Speaker 1 (03:43):
Actually, my parents had this ritual like every couple of years,
dates strolled into a bank like casually by some gold bars,
brinted home and locked away like it was the family treasure,
and there comes Lou the new year. They'd dust off
the statue and let me marvel at the shiny golds
(04:04):
bars like I was holding a piece of pirate.
Speaker 2 (04:07):
Louwait, so they would like on lunar new Year, open
up the safe and bring out the gold.
Speaker 1 (04:13):
Yes, and there would show the goads to me and say, look,
this is our treasury.
Speaker 2 (04:21):
Wow, now, out of curiosity, how many bars would there be?
Typically this is a secret, of course, chong Jing says.
A lot of older Chinese stash their gold at home.
She says it's kind of a tradition. The older generation
like to have their wealth where they can see it
(04:43):
and touch it when they want to. They prefer that
to keeping it in an account in some faraway bank
converted to a currency that risks depreciating with inflation. But
recently chong Jing noticed that buying gold isn't just a
thing that older Chinese do. Young people in China are
now also flocking to the gold markets.
Speaker 1 (05:03):
We have seen young people spending their savings often not
too much like on gold purchasing. Actually, consumers aged eighteen
to thirty four now make up over a third of
gold jury sales.
Speaker 2 (05:16):
And changing what kind of gold are they buying?
Speaker 1 (05:19):
They usually buy small pieces of gold jewelry around five
to six grams. It's just like small pieces gold ear rings,
gold bracelets, and gold rings. I don't think young people
are so much into gold bars. They're usually into like
gold beans, those little things.
Speaker 2 (05:37):
Gold beans like the size of a jelly bean.
Speaker 1 (05:40):
Yes, what do you do with gold beans. They just
save it in a small bottle. Every month they will
collect a gold bean and put it into the bottle,
so it's.
Speaker 2 (05:52):
Like a little visual piggy bang of gold beans. Yes,
exactly changing. Talk to several young people who bought gold
in Shroi Bay, some of them even traveled across several
provinces some hundreds of miles to the market. They told
her that Shoibet is a great attraction for a couple
of reasons, and not just for the gold.
Speaker 1 (06:15):
First, it's because there are a lot of good quality
knockoffs Ashrebe. You can get jury pieces that look just
like those from VanClief and Oppos or Tiffany's just for
a fraction of the cost.
Speaker 2 (06:28):
Another main draw is Shroybet's straightforward pricing system.
Speaker 1 (06:32):
So jury here is sold on a simple formula, which
is really interesting. So the formula is a base gold
price packed to the exchange benchmark and the craftsmanship fee
of around ten ym program and a lot of people
will bargain for the price.
Speaker 2 (06:49):
Schroy Bay isn't just the largest gold retail market in China,
it's also a manufacturing hub, which means.
Speaker 1 (06:57):
You can also diy your own design theer. You can
go there and melt your jury into gold bars, and
you can also do the opposite, melt your gold bars
into diy jewelry.
Speaker 2 (07:08):
So you can actually bring literal gold that's sitting around
your house and they'll melt it in front of you. Yes,
Chong Jing says. Young people in China used to think
gold jewelry was tacky, something the nuvo riche would wear
to show off. But that's changing, and now young consumers
are stashing gold for the same reason as their parents.
Speaker 1 (07:28):
They see gold as a secure option compared to other investments.
You know, at a time when the Chinese stock market
has seen a lot of turbulence, the economy has been
hammered by the slump in the real estate market. That's
really sent consumer confidence plunging, not to mention a depreciating currency.
Speaker 2 (07:48):
This frenzy demand from China helped push the country to
beat India as a world's top consumer of gold jewelry.
In twenty twenty three.
Speaker 3 (07:57):
Gold and Focused a just shy of twenty eight hunundreds
dollars here, but this is off note. It is an
all time record high. Yet again, a fresh record for
the safe haven here.
Speaker 2 (08:08):
And how long can the gold rally last and will
a new president in the White House change its course.
That's after the break. Gold prices reached a record high
(08:30):
of about two thousand, seven hundred and ninety dollars per
ounce last October. Analysts say central bank buying is what's
been driving gold prices up. Here's Samantha Dart, co head
of Global Commodities Research at Goldman Sachs.
Speaker 3 (08:45):
It's been the dominant driver of the upward gold moved
since twenty two. The moment that Russian financial assets were blocked,
then that sparks a lot of concern from a lot
of emergin markets, and in particular that who knows this
might happen to them one day. So central bank buying
(09:05):
has stepped up significantly fivefold from the average that we
observed prior to twenty twenty two.
Speaker 2 (09:12):
And Bloomberg's changing Lee says China's central bank has been
front and center of the gold rally.
Speaker 1 (09:19):
The People's Bank of China went on gold buying spree
for eighteen three months in twenty twenty three that ended
in a pro last year. This was its longest ever
run of purchases. It was looking to diversify its reserves
away from the dollar and hedge against currency depreciation, and
after a half year break, in November, shortly after the
(09:41):
gold reached its historical high, the Chinese Central Bank actually
resumed its gold buying, so we can see how caen
they are on buying the precious medal even as gold
prices remained elevated.
Speaker 2 (09:54):
Besides China's central Bank, there have been other factors driving
gold prices.
Speaker 1 (09:59):
Up last year. The gains in gold were also helped
by the US Federal reserves pivot to a loser monitored policy,
and when FED was in a rate cutting cycle, so
when the interest rate comes down, demand for interest based
safe haven investments like bonds may fall, leaving a safe
haven void in many portfolios. This helps boost the demand
(10:21):
for gold, but looking ahead, gold may face some pressure
as FED officials have emphasized the need to take a
more cautious approach to cut RAAIG this year because they're
starting to again worry about inflation.
Speaker 2 (10:34):
Gold prices in January have eased since October's record, but
they remained some thirty percent higher year on year, and
ongoing global turmoil from unrest in the Middle East to
political chaos in South Korea is expected to sustain the
demand for gold.
Speaker 1 (10:50):
So when politics get messy, gold gets popular.
Speaker 2 (10:54):
I always say tariffs is the most beautiful word.
Speaker 3 (10:56):
To me in the dictionary.
Speaker 2 (10:58):
And because tariffs gonna make as rich as hell, it's
going to break our countries. Business is back.
Speaker 1 (11:05):
Tensions from a potential trade war between US and China
or with the US's other top trading partners could drive
gold prices and demand for the safe haven asset, and
traders are also watching out for what implications US President
Donald Trump's domestic policies would have, such as on tariffs,
(11:25):
tax cuts, and immigration. All of these economists say could
impact the country's finances and re ignite inflation.
Speaker 2 (11:36):
So changing it's a pretty complicated picture when it comes
to gold, but that doesn't appear to have lessened its
appeal to Chinese buyers. What's your sense on how long
this gold mania might last?
Speaker 1 (11:48):
Annaly say the market our looker remains strong because gold
is a symbol of wealth and prosperity, and people always
buy jury as gifts for festivals and these. There are
also analysts saying that consumers often delay or cut back
on gold purchases when prices rise sharply, so there might
(12:12):
be a little volatilities out there, but this will not
change the fundamentals of gold consumption in China, which is
which is people like gold and will buy it.
Speaker 2 (12:28):
This is The Big Take Asia from Bloomberg News. I'm
wan ha and a happy Lunar New Year to all
of you who celebrated. This episode was produced by Young Young,
Naomi and Jessica Beck. It was mixed by Omer Sultan,
sound designed by Jessica, and fact checked by Young and Naomi.
It was edited by Caitlin Kenny, Patty Hirsch, Jessica Joe,
(12:48):
and Sybylla Gross. There was additional reporting by Alfred Sound.
Naomi Shaven is our senior producer, Elizabeth Ponzo is our
senior editor, Nicole Beemster Bower is our executive producer, and
Sage Bauman is Bloomberg's head of Podcasts. Please follow and
review The Big Take Asia wherever you listen to podcasts.
It really helps new listeners find the show. See you
(13:09):
next time.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
At the center of Shanzhen, a city in southern China
not too far from Hong Kong, lies a special little
district called Choi Bai. Choi Bay is known as a
place to go if you're looking to buy one specific thing.
Speaker 1 (00:30):
Tribe is among the largest gold retail markets in the world,
and definitely the largest in China by volume of gold.
Speaker 2 (00:37):
That's Bloomberg reporter Chong Jingle based in Hong Kong.
Speaker 1 (00:41):
So if you go to the Shribune market there are
like more than ten thousand business clustered across several city blocks.
You will be greeted by endless rows of glittering jury
that would make your head spin, and at almost any
time of the day, the place always buzzes with crowds
of customers eagling, browsing, selecting, and snapping up their favorite pieces.
Speaker 2 (01:11):
The popularity of this market has been fueled in part
by live streamers who hog their gold on doin Chinese TikTok.
(01:31):
And while gold has always been a popular commodity in China,
the investment demand for the precious metal is attracting attentionately.
Speaker 1 (01:39):
With the slowdown in the Chinese economy, people have been
shrinking their spending on all kinds of goods. Joey purchases
like diamonds have really taken a hit as Chinese buis
have tightened their belts, But the allure of gold as
the safe place to park one's cash remains, and we
are seeing consumers showing percent and demands for investment products
(02:02):
like gold bars and coins as a way to safeguard wealth.
Speaker 2 (02:08):
Welcome to the Big Take Asia from Bloomberg News. I'm wanh.
Every week we take you inside some of the world's
biggest and most powerful economies and the markets, tycoons and
businesses that drive this ever shifting region. Today on the
show China's Gold Rush, Why are Chinese consumers so keen
on the precious metal, what's driving the dizzying rally in
(02:32):
gold and how long will it last? Gold is popular
all over the world, but in China the commodity is
appreciated on a whole other level. The Chinese love gold.
It's not just a symbol of beauty, luck and fortune.
(02:54):
In China, gold often means something special and marks important milestones.
Speaker 1 (03:00):
So when you're born, it's typical for others to give
you golden bracelets for your wrists and ankles, and when
you get married, you door yourself in gold. In Hong Kong,
where I'm based, during the wedding banquet, brides will be
covered in gold ornaments. I'm talking about gold bengals stacked
up to the elbows. These oversized twenty four cara gold
(03:24):
necklace are usually in the shape of pigs, which symbolizes well,
prosperity and fertility. And gold is also just the kind
of jury that you can pass on for generations.
Speaker 2 (03:34):
Cho Jing, who was born in mainland China, grew up
understanding gold special role not just in Chinese culture, but
also for her family.
Speaker 1 (03:43):
Actually, my parents had this ritual like every couple of years,
dates strolled into a bank like casually by some gold bars,
brinted home and locked away like it was the family treasure,
and there comes Lou the new year. They'd dust off
the statue and let me marvel at the shiny golds
(04:04):
bars like I was holding a piece of pirate.
Speaker 2 (04:07):
Louwait, so they would like on lunar new Year, open
up the safe and bring out the gold.
Speaker 1 (04:13):
Yes, and there would show the goads to me and say, look,
this is our treasury.
Speaker 2 (04:21):
Wow, now, out of curiosity, how many bars would there be?
Typically this is a secret, of course, chong Jing says.
A lot of older Chinese stash their gold at home.
She says it's kind of a tradition. The older generation
like to have their wealth where they can see it
(04:43):
and touch it when they want to. They prefer that
to keeping it in an account in some faraway bank
converted to a currency that risks depreciating with inflation. But
recently chong Jing noticed that buying gold isn't just a
thing that older Chinese do. Young people in China are
now also flocking to the gold markets.
Speaker 1 (05:03):
We have seen young people spending their savings often not
too much like on gold purchasing. Actually, consumers aged eighteen
to thirty four now make up over a third of
gold jury sales.
Speaker 2 (05:16):
And changing what kind of gold are they buying?
Speaker 1 (05:19):
They usually buy small pieces of gold jewelry around five
to six grams. It's just like small pieces gold ear rings,
gold bracelets, and gold rings. I don't think young people
are so much into gold bars. They're usually into like
gold beans, those little things.
Speaker 2 (05:37):
Gold beans like the size of a jelly bean.
Speaker 1 (05:40):
Yes, what do you do with gold beans. They just
save it in a small bottle. Every month they will
collect a gold bean and put it into the bottle,
so it's.
Speaker 2 (05:52):
Like a little visual piggy bang of gold beans. Yes,
exactly changing. Talk to several young people who bought gold
in Shroi Bay, some of them even traveled across several
provinces some hundreds of miles to the market. They told
her that Shoibet is a great attraction for a couple
of reasons, and not just for the gold.
Speaker 1 (06:15):
First, it's because there are a lot of good quality
knockoffs Ashrebe. You can get jury pieces that look just
like those from VanClief and Oppos or Tiffany's just for
a fraction of the cost.
Speaker 2 (06:28):
Another main draw is Shroybet's straightforward pricing system.
Speaker 1 (06:32):
So jury here is sold on a simple formula, which
is really interesting. So the formula is a base gold
price packed to the exchange benchmark and the craftsmanship fee
of around ten ym program and a lot of people
will bargain for the price.
Speaker 2 (06:49):
Schroy Bay isn't just the largest gold retail market in China,
it's also a manufacturing hub, which means.
Speaker 1 (06:57):
You can also diy your own design theer. You can
go there and melt your jury into gold bars, and
you can also do the opposite, melt your gold bars
into diy jewelry.
Speaker 2 (07:08):
So you can actually bring literal gold that's sitting around
your house and they'll melt it in front of you. Yes,
Chong Jing says. Young people in China used to think
gold jewelry was tacky, something the nuvo riche would wear
to show off. But that's changing, and now young consumers
are stashing gold for the same reason as their parents.
Speaker 1 (07:28):
They see gold as a secure option compared to other investments.
You know, at a time when the Chinese stock market
has seen a lot of turbulence, the economy has been
hammered by the slump in the real estate market. That's
really sent consumer confidence plunging, not to mention a depreciating currency.
Speaker 2 (07:48):
This frenzy demand from China helped push the country to
beat India as a world's top consumer of gold jewelry.
In twenty twenty three.
Speaker 3 (07:57):
Gold and Focused a just shy of twenty eight hunundreds
dollars here, but this is off note. It is an
all time record high. Yet again, a fresh record for
the safe haven here.
Speaker 2 (08:08):
And how long can the gold rally last and will
a new president in the White House change its course.
That's after the break. Gold prices reached a record high
(08:30):
of about two thousand, seven hundred and ninety dollars per
ounce last October. Analysts say central bank buying is what's
been driving gold prices up. Here's Samantha Dart, co head
of Global Commodities Research at Goldman Sachs.
Speaker 3 (08:45):
It's been the dominant driver of the upward gold moved
since twenty two. The moment that Russian financial assets were blocked,
then that sparks a lot of concern from a lot
of emergin markets, and in particular that who knows this
might happen to them one day. So central bank buying
(09:05):
has stepped up significantly fivefold from the average that we
observed prior to twenty twenty two.
Speaker 2 (09:12):
And Bloomberg's changing Lee says China's central bank has been
front and center of the gold rally.
Speaker 1 (09:19):
The People's Bank of China went on gold buying spree
for eighteen three months in twenty twenty three that ended
in a pro last year. This was its longest ever
run of purchases. It was looking to diversify its reserves
away from the dollar and hedge against currency depreciation, and
after a half year break, in November, shortly after the
(09:41):
gold reached its historical high, the Chinese Central Bank actually
resumed its gold buying, so we can see how caen
they are on buying the precious medal even as gold
prices remained elevated.
Speaker 2 (09:54):
Besides China's central Bank, there have been other factors driving
gold prices.
Speaker 1 (09:59):
Up last year. The gains in gold were also helped
by the US Federal reserves pivot to a loser monitored policy,
and when FED was in a rate cutting cycle, so
when the interest rate comes down, demand for interest based
safe haven investments like bonds may fall, leaving a safe
haven void in many portfolios. This helps boost the demand
(10:21):
for gold, but looking ahead, gold may face some pressure
as FED officials have emphasized the need to take a
more cautious approach to cut RAAIG this year because they're
starting to again worry about inflation.
Speaker 2 (10:34):
Gold prices in January have eased since October's record, but
they remained some thirty percent higher year on year, and
ongoing global turmoil from unrest in the Middle East to
political chaos in South Korea is expected to sustain the
demand for gold.
Speaker 1 (10:50):
So when politics get messy, gold gets popular.
Speaker 2 (10:54):
I always say tariffs is the most beautiful word.
Speaker 3 (10:56):
To me in the dictionary.
Speaker 2 (10:58):
And because tariffs gonna make as rich as hell, it's
going to break our countries. Business is back.
Speaker 1 (11:05):
Tensions from a potential trade war between US and China
or with the US's other top trading partners could drive
gold prices and demand for the safe haven asset, and
traders are also watching out for what implications US President
Donald Trump's domestic policies would have, such as on tariffs,
(11:25):
tax cuts, and immigration. All of these economists say could
impact the country's finances and re ignite inflation.
Speaker 2 (11:36):
So changing it's a pretty complicated picture when it comes
to gold, but that doesn't appear to have lessened its
appeal to Chinese buyers. What's your sense on how long
this gold mania might last?
Speaker 1 (11:48):
Annaly say the market our looker remains strong because gold
is a symbol of wealth and prosperity, and people always
buy jury as gifts for festivals and these. There are
also analysts saying that consumers often delay or cut back
on gold purchases when prices rise sharply, so there might
(12:12):
be a little volatilities out there, but this will not
change the fundamentals of gold consumption in China, which is
which is people like gold and will buy it.
Speaker 2 (12:28):
This is The Big Take Asia from Bloomberg News. I'm
wan ha and a happy Lunar New Year to all
of you who celebrated. This episode was produced by Young Young,
Naomi and Jessica Beck. It was mixed by Omer Sultan,
sound designed by Jessica, and fact checked by Young and Naomi.
It was edited by Caitlin Kenny, Patty Hirsch, Jessica Joe,
(12:48):
and Sybylla Gross. There was additional reporting by Alfred Sound.
Naomi Shaven is our senior producer, Elizabeth Ponzo is our
senior editor, Nicole Beemster Bower is our executive producer, and
Sage Bauman is Bloomberg's head of Podcasts. Please follow and
review The Big Take Asia wherever you listen to podcasts.
It really helps new listeners find the show. See you
(13:09):
next time.
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