BEIJING (Reuters Life!) - They hunted for bargains. They haggled. Customers and merchants, hoping China can keep the global financial crisis at bay, turned a bustling jewelry fair at one of the world’s biggest gold consumers into a bazaar.
Visitors sought lower prices than those in high street stores, while designers and wholesellers tempted retailers ordering for the next season with offers.
Items at the fair ranged from standard gold earrings, priced by the gram, to the tailor-made luxury of a gold tiara or bra.
The star of the showcases at Tu Chunhua’s booth at the China International Jewelry Fair was a diamond ring priced at 55,710 yuan ($8,159). Tu was confident the wealthy Chinese he sells to would be able to weather the storm.
“The financial crisis is making an impact abroad and on export companies but there is not much of an impact on our domestic manufacturers. We mainly focus on the domestic market,” said Tu, general manager of jewelry retailer Arts Diamond.
On the surface, things are looking up. China’s annual retail sales figures for October showed jewelry sales to be up 30 percent from last year.
However, October sales growth slowed noticeably compared with the previous three months, when jewelry sales were up by more than 40 percent on the year.
China is the world’s second-largest gold consumer, although per capita demand lags well behind India and even Hong Kong.
Demand for gold for jewelry in China is on track to exceed last year, based on figures for the year through September. Demand for gold for jewelry reached 241.6 tonnes in the first nine months of 2008, compared with 302 tonnes for all of 2007, when gold jewelry demand grew by 26 percent.
Still, Shanghai’s millionaire goods fair last month disappointed hopes, when the most expensive item, a 7 million yuan ($1.03 million) diamond necklace, failed to sell. Overall sales were lower than at last year’s fair, media reported.
Patterns of gold demand also show a growth in worried buyers. China’s 38.4 tonnes of demand for gold as a retail investment tool in the first three quarters of this year surpassed demand in all of last year by 60 percent.
Chinese investors see gold as a safe choice in comparison with the volatile Chinese stock market, said Zhang Guoan, chief executive of gold wholesale company Guilu Jewelry and a 30-year veteran in the gold business.
“You could say that Chinese people are thinking about maintaining the value of their investment. Gold is a kind of currency so it is safe for people to invest their extra money in buying gold,” he said.
“This is a good idea.”
Gold still has a symbolic value in China’s rapidly developing economy, said Jiang Yahui, a visitor to the fair.
“When you get married, certainly gold is for marriage; or to give to your parents as a present. And women, normally over 30 years old, think that wearing gold gives you an air of sophistication,” said the Beijing resident, who admitted she did not own any gold herself.
Writing by Lucy Hornby, editing by Miral Fahmy