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