By far the largest exporter of gold to China and to Hong Kong is Switzerland and its latest figures for 2014 suggest that 36% of Swiss gold exports are now going to mainland China directly
Latest precious metals export data out of Switzerland for the full 2014 year suggest that in that year, taking gold specific exports only, around 36% of the gold exported to Hong Kong and China combined actually went directly into China rather than via the former British Crown Colony. As various reports in the media have suggested, India was the biggest recipient of Swiss gold at 471.2 tonnes, but China and Hong Kong, which after all is a special administrative region of China, together took in 590.4 tonnes, further suggesting China, contrary to some reports, remained the world’s biggest gold consumer last year..
Totals Swiss gold exports for the year were some 1,746 tonnes and the top 10 importers of Swiss gold in 2014 are set out in the table below. Between them they account for over almost 90% of all Swiss gold exports. The next three most significant importers of Swiss re-refined gold were France with 37 tonnes, the UK with 29.8 tonnes and Malaysia with 22.6 tonnes.
Table: Top 10 recipients of Swiss gold exports
||% of Swiss Gold exports
|2. Hong Kong
|3. China (Mainland)
|7. United Arab Emirates
|8. Saudi Arabia
Source: Swiss Federal Administration
So what is the significance of this? For many years very little gold was imported directly to mainland China. Nearly all came in via Hong Kong. So Hong Kong (which published its gold import/export data) was widely seen as a proxy for total Chinese gold imports. China itself didn’t publish such data so what might have been coming in directly was widely disregarded by Western analysts as of no consequence.
But last year, China moved the goalposts, and eased the path of gold imports directly to the mainland from other countries than Hong Kong. However because China doesn’t publish direct gold import data no-one really knows exactly how much gold is now flowing into China directly and although Hong Kong is now not the only significant import route Western mainstream media often imply the Hong Kong data still equates to Chinese demand – so the recent news that exports from Hong Kong to China fell 32% last year was widely seen as an indicator that Chinese consumption fell by a similar amount.
Thus the latest official export data from Switzerland (as do the latest figures for U.S. gold exports) show that for a large part at least of China’s gold imports, around a third are now going into China directly which makes the Hong Kong figures ever less indicative of the overall picture.
The other interesting point from the Swiss statistics is that this small nation takes in, re-refines and then exports a volume of gold equivalent to around 56% of the world’s newly mined annual gold supply. The volumes of gold being exported to other countries than India and China/Hong Kong are also worthy of note – particularly imports into Singapore and Thailand being other key Asian gold consumers – and Saudi Arabia, Turkey and the United Arab Emirates, which between them accounted for as being strong indicators of Middle Eastern demand. Between them these three states imported 195 tonnes of Swiss re-refined gold – some of which was doubtless destined for Iran and Islamic State, both of which are cut off from direct gold supplies from normal sources. Gold exports and imports can be a murky business at the extremes!