China is poised to pass India as the largest bullion consumer as early as this year after New Delhi raised import taxes and Beijing made investing easier, the China Gold Association said. China approved its first two domestic exchange-traded products backed by the metal this month while India raised levies to curb demand that is feeding a current-account gap. The two countries account for more than half of global demand. "We saw some frenzied buying following gold's rout in April and our preliminary estimate confirms that consumption reached about 137 tonnes, more than double a typical month," Zhang Yongtao, the association's vice-chairman, said yesterday in Zhaoyuan, Shandong province. "Chinese demand for gold will remain robust because people are getting wealthier and investment choices are limited." Gold's slump into a bear market in April spurred "unprecedented" demand from both countries as buyers thronged shops for jewellery, coins and bars, the producer-funded World Gold Council said in May. Bullion fell 20 per cent this year amid concern the US Federal Reserve may rein in stimulus that helped it cap a 12-year bull run last year and as investors reduced holdings in exchange-traded products backed by the metal. Bullion of 99.99 per cent purity on the Shanghai Gold Exchange fell 4.3 per cent in the first quarter. The international gold price fell than 4 per cent to below US$1,300 an ounce last night. China's domestic consumption totalled 776.1 tonnes in 2012, compared with 864.2 tonnes in India, according to the gold council. Zhang of the Chinese association said consumption jumped more than 36 per cent to 456.2 tonnes in the four months of this year. "Per capita gold holdings in China are little more than 5 grams, compared with the average 20 grams in developed countries, so there's huge potential as long as the economy is growing," he said at a gold mining conference in the city. "Total demand this year is likely to be in the range of 900 to 1,000 tonnes." India raised the import duty to 8 per cent from 6 per cent on June 5, a fourfold increase from January last year and the central bank placed curbs on shipments on a consignment basis and limited inbound shipments for local consumption against cash. Imports into India surged in the past two months as prices plunged and investors sold the metal in favour of riskier assets. "They may come up with stricter policies from import point of view by putting some controls or limits on tonnage if the measures already taken do not help," Haresh Soni, chairman of the All India Gems & Jewellery Trade Federation, said this week. China overtook South Africa to become the world's largest producer in 2007, with 270.4 tonnes of output that year.