As gold prices hit another historic high, Shenzhen's Shuibei district—China's largest gold and jewelry wholesale market—quietly removed "investment gold" from its offerings.
Following the introduction of new gold tax policies in November, Shuibei's pricing system underwent multiple adjustments. Initially, digital displays separately listed "investment gold" and "jewelry gold" prices. However, recent visits revealed that the market no longer distinguishes between the two, with the price display platform "Shuibei Hui" also removing the "investment gold" category.
Some Shuibei merchants stated on social media that "investment gold no longer exists in Shuibei."
The adjustment aligns with China's newly issued tax policy on gold, which classifies gold into investment and non-investment categories and encourages centralized trading of investment gold on exchanges like the Shanghai Gold Exchange (SGE) and Shanghai Futures Exchange (SHFE).
On December 22, a Shuibei Hui representative explained the changes: First, post-tax reform, profit margins have diverged between SGE members and non-members. Second, the dual pricing system misled consumers, prompting its discontinuation.
Amid surging global gold prices, major jewelry brands like Chow Tai Fook and Chow Sang Sang saw their prices exceed ¥1,400 per gram on December 23, a daily increase of over 2.5%. Meanwhile, Shuibei's gold price surpassed ¥1,160 per gram.
Despite the transition period, Shuibei's markets remained bustling. Price displays now only show unified rates for gold, platinum, and silver, closely mirroring former jewelry gold prices.
Merchants confirmed they’ve halted investment gold sales, redirecting customers to banks. A few shops still list varied purity-based prices but avoided commenting on the discrepancy.
Shuibei, dubbed "China’s Jewelry Capital," hosts nearly 8,000 businesses, generating over ¥155 billion in 2025 revenue. Its wholesale model, offering competitive pricing and integrated services, draws massive foot traffic—exceeding 120 million visits annually.
However, the tax reform has squeezed margins for non-SGE members, rendering investment gold sales nearly unprofitable. Some merchants with older inventory or recycling channels may still offer lower prices.
An industry insider noted that Shuibei operates on a "factory-to-store" wholesale model, lacking financial exchange licenses, thus adhering to physical trade logic rather than financial trading norms.
The Shuibei Hui official emphasized that the pricing overhaul aims to reflect post-reform market realities and prevent consumer confusion. SGE membership now dictates competitive advantage, with only about 20 qualified dealers in Shenzhen.
Under the new policy, SGE members enjoy tax benefits for investment gold transactions, while non-members face higher costs. Analysts predict this will accelerate industry consolidation, favoring established brands.
Looking ahead, Shuibei’s transformation hinges on strengthening consumer-centric supply chains, enhancing branding, quality control, and regulatory compliance in its capital-intensive industry.
Despite the changes, Shuibei’s markets remain vibrant, signaling resilience amid reform challenges.
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