Gold Investor, October 2018

KUALA LUMPUR, 25 JULY 2026 —

China’s gold market has overtaken the West as Beijing pushes liberalisation, stronger regulation and deeper internationalisation, World Gold Council’s Gold Investor showed on Thursday.

The insurance industry alone now manages US$2 trillion of assets, a decade-long expansion that has opened a US$2 trillion opportunity to put gold on institutional balance sheets, the Insurance Asset Management Association of China said.

Regulators at the Financial Research Institute of the Development Research Center of the State Council urge faster upgrades to market infrastructure and rules to restore confidence after years of patchwork oversight. Their call is echoed by the China Gold Association, which wants miners to become disciplined, outward-facing champions that can compete globally as Beijing prepares the mining sector for international markets.

The blueprint is the Belt and Road Initiative, now a US$1 trillion-plus network of trade corridors. Bank of China International estimates the infrastructure drive will leave the gold market more integrated with emerging economies, raising demand for physical bullion and refined products along the routes.

China already leads the world in jewellery fabrication. Chow Tai Fook, the sector’s largest retailer, forecasts brighter demand from younger, affluent buyers provided the industry updates designs and distribution. The group expects mid-single-digit volume growth in the next three years as millennials trade up to higher-margin pieces.

Aram Shishmanian, former World Gold Council chief executive, writes that the centre of the gold trade has moved from West to East. “This is reflected in the increased number of Chinese mining companies joining the World Gold Council,” he notes. To formalise their role, the Council created a China Chapter chaired by Song, chairman of China Gold International Resources Corp Ltd and the China Gold Association.

The platform lets the biggest miners and refiners shape global gold policy.

Professor Zhou of Tsinghua University’s PBC School of Finance warns that China must leverage past lessons to build deeper, safer capital markets amid geopolitical tensions. He argues that gold can help insurers and pension funds diversify beyond domestic equities and bonds without adding currency risk.

The insurance sector’s US$2 trillion asset pool is the clearest illustration of the opportunity. Chinese regulators have gradually allowed insurers to hold more alternative assets; gold is next on the list. The Insurance Asset Management Association calculates that even a 1% allocation across the industry would absorb about 300 tonnes a year—roughly equal to the country’s entire mine supply.

Stronger regulation is the prerequisite. The Financial Research Institute says clearer trading rules and custodian standards would cut settlement delays and reduce the 5–10% haircuts investors currently face on forward contracts. Its modelling shows that tighter oversight could lift annual gold investment inflows by as much as RM10 billion (US$2.4 billion) within five years.

The mining industry is also being reshaped. The China Gold Association says disciplined producers with transparent reserves can win international financing and list on overseas bourses. Smaller, high-cost mines will struggle unless they merge or modernise, raising industry consolidation from today’s 3,000 operators to fewer than 500 within a decade.

The Belt and Road Initiative will amplify these trends. Bank of China International expects gold-backed ETFs and vaulting services to appear along corridors in Southeast Asia, Central Asia and the Middle East, lowering transaction costs for merchants and pilgrims who traditionally carry bullion. The bank forecasts a 15–20% rise in regional gold trade volumes by 2025, with China supplying about half of the incremental metal.

For Malaysian business readers, the shift matters because it tightens the link between China’s gold policy and regional trade flows; a tighter Chinese market raises the premium Malaysian refiners and jewellers can command for 9999 kilobars and 24-karat jewellery.

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