After a surge in demand for gold jewellery, bars and coins, the World Gold Council forecasts Chinese gold purchases will top 1,000 tonnes in 2013. That is well ahead of India where government restrictions aimed at supporting the currency and reducing a current account deficit have curbed bullion imports.
Redemptions from gold-backed exchange-traded funds (ETFs) have jumped as the price of bullion has fallen - 650 tonnes from the top eight funds so far this year - and much of that may have headed to China from Europe.
Refiners say they have been converting 400 ounce bars typically bought by ETFs into 1 kg bars (kilobars) to be shipped to China. Kilobars are used for making jewellery and are also popular as an investment product.
"We see huge flows of gold in and out of Switzerland, an inflow of large bars, which we convert to smaller bars," Scott Morrison, chairman of gold refiner Metalor, said from Neuchatel.
"From April to August, we saw very large volumes from all our refineries headed to Asia," he said, adding that the bulk of the company's production in Hong Kong went to China.
Gold suffered its biggest drop in 30 years in April, spurring demand. Chinese buying has cooled from peak levels around then but remains high.
"We have to realise that there is now a very important player in the market," said Bernhard Schnellmann, director of Swiss-based Argor-Heraeus, one of the biggest gold refineries, which has also been converting ETF bars for the Chinese market.
About 70 percent of Argor-Heraeus's kilobar production was being shipped to China, he said.
"If you look a few years back, there was no China. Now they are the new kid on the block and they are a big kid already."