The World Gold Council, on 15th April 2014, published a major report "China's gold market: Progress and Prospects".%% The report delves into gold market in China, main drivers of the demand, analysis of demand characteristics etc. The report also looks into the factors that have driven China's rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s. It also highlights why despite this steep growth in demand, the market will continue to expand, irrespective of short term blips in the economy.%% As per the report private sector demand for gold in China is set to increase from the current level of 1,132 tonnes (t)¹ per year to at least 1,350t by 2017. As per the report, the next 6 years will see China's middle class grow by over 60 per cent, or 200m people, to a total of 500 million. Besides the newly emerging middle classes, rising real incomes, a deepening pool of private savings and rapid urbanisation across China suggest that the outlook for gold jewellery and investment demand in the next 4 years will remain strong.%% Reflecting on the gold market in China, Albert Cheng, Managing Director of the Far East at the World Gold Council said, "Since liberalisation of the gold market began in the late 1990s and the subsequent offering of gold bullion products by local commercial banks from 2004, we have witnessed astonishing increases in demand for gold from consumers across the country. The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further. The country is now at the centre of the global gold eco-system."%% China has become the world's number one jewellery market, nearly trebling in size over the past decade - at 669t in 2013, it accounts for 30 per cent of global jewellery demand. Estimates suggest that demand will continue to grow and reach 780t by 2017. There are now over 100,000 retail outlets selling 24k gold and thousands of manufacturers nationwide. Besides, consumer sentiment toward gold is unwavering - although 40% of jewellery consumption relates to weddings, the appetite for gold in China goes beyond occasions and gift giving. 80% of consumers surveyed for this report planned to maintain or increase their spending on 24-carat gold jewellery over the next 12 months believing that gold will hold its long-term value and because they expect to have a higher level of disposable income.%% The report predicts that Chinese electronics demand for gold will see small gains in the next 4 years - industrial demand has grown with electronics being the key driver (climbing from 16t in 2003 to 66t in 20134). China is also the leading market for gold related patents such as the use of nanogold in healthcare. Official gold holdings in China totalled 1,054t at the end of 2013 making the country the world's sixth largest holder of bullion - based on this declared stock, gold represents 1 per cent of China's total official reserves (down from a peak of almost 2% in 2012) due to the rapid growth of the country's foreign exchange holdings which reached around US$3.8 trillion at the end of 2013. Speculation continues as to whether the Chinese government has increased its gold holdings.%% While interacting with the media, Somasundaram PR, Managing Director, India, World Gold Council said, "China is using gold in proactive manner as a financial asset. The government is working towards building an ecosystem for production to consumption. China has embedded gold in the financial system which has resulted in the increase in the demand for gold in the country.%% Despite the global slowdown, the report suggests that 2014 is likely to see consolidation while the succeeding years are likely to see sustained growth.