China's possessions of the precious yellow metal gold may be more than what its official data had revealed.

On Tuesday, the China Gold Association (CGA) disclosed the world's second-largest economy, ditto the biggest gold-producing nation and greatest importer of the precious metal as well, produced a record 360.96 tonnes of gold in 2011, a 5.89 per cent over a year ago figures. The latest statistics earned China the label as the world's top gold producer for a fifth consecutive year, according to the association.

However, the Chinese have never been really transparent on totally declaring exact numbers of such acquisitions, as with the case of its total gold reserves holdings. China, although it periodically issues bits and pieces of information on it, had never really admitted how much gold it has.

This week's data announcement, though not necessarily tampered, maybe just the tip of the iceberg, www.mineweb.com reported, quoting Jeff Nichols, specialist precious metals analyst of American Precious Metals Advisors and Rosland Capital.

"Actual gold mine output could easily be close to 400 tonnes and possibly more," Nichols said.

China's gold production and consumption may be considerably higher over the CGA disclosure, Mr Nichols noted, on account that the CGA only includes in its tally production numbers submitted by its members, eliminating in the process gold production contributions by non-members. Non-members would include many small, unofficial mining operations that mostly operate in the "underground economy," Mr Nichols said.

Moreover, CGA data likewise does not include production from mines owned and operated by the military. Also exclude were by-product outputs from copper, silver, and other metal mining activity.

The analyst also pointed out the existing practice of jewelry recycling, which in fact adds to secondary supply production line-up. In recent years global secondary supply collected from scrap recycling of jewelry, investment bars, and industrial scrap contributed roughly one-third of total worldwide supply.

"If scrap contributed only five or ten per cent of China's total gold supply it would still be quite important," Mr Nichols said in www.mineweb.com.

There is also the factor of "illegal imports" or simply, gold smuggled into China.

"We know smuggling is quite significant in some countries. We can only imagine how many tons of gold in the form of tael bars, wafers, coins, investment-grade jewelry, etc. is carried into China each year by travellers and professional smugglers," Mr Nichols pointed out.

"All in all, Chinese gold production, and consumption, may be considerably higher than that suggested by official and semi-official statistics coming out of the Asian giant."

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