China's gold output jumped 11.34 percent to a record of 313.98 tonnes in 2009, the China Gold Association said on Thursday, securing the country's position as the world's largest producer of the yellow metal. China has dramatically opened bullion markets to active trade in the past decade, including allowing gold to be traded freely on the Shanghai Gold Exchange.
Gold hoarding was initially outlawed in 1949 when the Communists took power. Nearly 60 percent of China's gold output in 2009 came from the top five producing provinces - Shandong, Henan, Jiangxi, Fujian and Yunnan. China had more than 700 gold producers in 2009, down from more than 1,200 firms in 2002 as the industry consolidated. China produced a mere 4.07 tonnes of gold in 1949.
The China Gold Association gave no figures for last year's consumption, but China consumed 395.6 tonnes of gold in 2008. China said last April its official gold holdings had risen to 1,054 tonnes from 600 tonnes in 2003, with the increase attributed to purchases of domestically produced gold to help soak up unsold output.
Metals consultancy GFMS said last month that China, the world's most populous nation, would overtake India, the second most populous nation, as the world's largest gold consumer in 2009. Total demand is forecast at 432 tonnes as wealthy investors defy record bullion prices. Gold inched up to $1,092 an ounce on Thursday, well below a lifetime high around $1,226 an ounce struck in early December.
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