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China

Feb 1, 2013 12:04 AM   By Julius Zheng
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Economic Pick-up Anticipated

The Beijing Municipal Commission of Commerce announced that during the three-day New Year holiday, the city’s 127 major retailers sold $338 million of merchandise, an increase of 25.8 percent year on year. Thanks to such government-supported promotions as the Gold and Jewelry Consumption Festival, which extended through the New Year holiday, gold and jewelry were selling well in Beijing, with revenues in that category totaling $123 million for 35 department stores during the three-day
period, an increase of 22.57 percent year on year.

   Caibai, a well-known jewelry store, reached gold and jewelry sales
of $25.7 million, a year-on-year increase of 35.47 percent. The company reported that gold coins, bars and figurines celebrating the New Year were very popular and that lighter-weight gold and silver ornaments were popular gifts to children from the older generation.

ROBUST SALES IN SHANGHAI
   In Shanghai, 372 large and midsized retailers had sales of $1.27 billion during the four days from December 31, 2012, through January 3, 2013,
an increase of 8.1 percent year on year. Online sales reached $244 million, surging 83.3 percent. Specialty stores reported sales of $131.8 million, gaining 12 percent, among which the electronic appliance stores had the highest growth rate of 18.1 percent, with gold and jewelry stores in
second place with 13.9 percent.

   Buoyed by the recent totals, retailers are hoping for the best for the next and even bigger sales season centered around the Chinese New Year of the Snake starting February 10.

OPTIMISTIC ABOUT 2013
   A joint forum on China’s economic forecast was held in New York City in January by the National Committee on U.S.-China Relations, based in New York, and the China Center for Economic Research (CCER),
based in Beijing. Speaking at the forum, Justin Yifu Lin, former senior
vice president and chief economist of the World Bank, predicted that the Chinese economy would grow at a rate between 8 percent and 8.5 percent in 2013, faster than in 2012. Lin said investment would continue to be
a strong driving force for the Chinese economy, adding that household income and domestic consumption would also expand rapidly. He noted that China could maintain an average annual growth rate of 8 percent
over the next two decades, due to the great potential in industrial upgrading
and infrastructure investment.

   Huang Haizhou, chief strategist at China International Capital Corporation (CICC), told the forum the country’s economic growth will come in at 8.1 percent in 2013. “With the new government of China now
in place, in the next few years, China’s growth will not only stabilize but will accelerate,” he said.

   Meanwhile, the National Bureau of Statistics of China announced on January 18 that the country’s growth rate in 2012 was 7.8 percent, which exceeded the target of 7.5 percent.

NEW AUCTION CHANNEL
   China Guardian Auctions, a large auction house based in Beijing, successfully auctioned a white gold necklace with matching earrings for $351,000 on May 13, 2012, just one of the jewelry lots that have been
sold by auction in the country in recent months. The set featured 50 oval emeralds with a total weight of 39.37 carats, and marquise and round diamonds totaling approximately 13.6 carats.

   Currently, a very small number of top auction houses make the majority of sales, and there are still a number of problems inside the young industry, such as false representation and delayed payment to the owners of items
that sell at auction.

   According to the information released by the National Auction Conference in November 2012, the first modern auction house in China
was founded in 1986 in Guangzhou, after which the number of auction houses increased rapidly to 5,781 by September 2012. During 2011,
57,671 auctions were held, with total sales of more than $10 billion. The modern auction industry in China has a history of only 26 years, but has been increasing at an annual rate of 15 percent each year since 2001 and now stands as an important sector of sales and service.

   A variety of goods are offered through auctions, depending on auction licenses, including land, real estate, vehicles, arts and antiques, jewelry and watches, and even fine wines. In recent years, due to increasing demand from investors and collectors, auctions of modern and ancient paintings, calligraphy, jewelry, watches, clocks, stamps and coins are becoming increasingly popular. Although most of the auction houses in China do not yet offer jewelry as a main category, that could change quickly because of the increasing public interest in and demand for jewelry and gemstones.
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