China may overtake the U.S. to become the world’s largest diamond market by the end of 2015 as rising incomes spur a taste for luxury goods, Antwerp World Diamond Center Chief Executive Ari Epstein said. China is also set to displace India this year as the biggest gold user, the World Gold Council said. Chinese gold jewelery purchases are expected to rise 10% to 20% this year after surging 13% to 510.9 tons last year. Investment in gold bars and coins is forecast to jump 25%, after swelling by 38% to 258.9 tons last year. “We see that [diamond] consumption in China is increasing every year by about 25%,” Epstein said in Beijing. The expanding middle class combined with an affinity for jade, gold and diamonds will fuel demand. China is now ranked second-largest consumer of polished diamonds after the U.S., with USD5 billion worth of sales a year, Epstein added. The country didn’t appear on Belgium’s list of top seven polished diamond export destinations in 2008, according to the center’s website. China imported a total of 9.28 million carats of both polished and uncut diamonds, with a total value of USD5.09 billion, from Antwerp in 2011. China is expected to become the biggest destination for diamond exports by the end of 2016. In 2011, the U.S. was the biggest consumer of polished diamonds, accounting for 36% of total world demand, followed by China with a market share of 12% and India with 11%. Epstein said that the rise in China’s domestic demand has also triggered a rush to Antwerp by Chinese companies to trade in the gemstones. The Antwerp Center plans to set up a “polished desk”, either in Shanghai, or one of China’s other heavily industrialized cities, to sell diamonds to jewelry companies. Epstein said that China will become a more important manufacturing center for diamond cutting and polishing, regardless of the rising labor costs, the China Daily reports.

During the seven-day Lunar New Year holiday at the end of January, the value of sales for large retail and catering companies rose to about CNY470 billion from a year earlier, an increase of 16.2%, compared with a growth rate of about 19% in 2011, according to data released by the Ministry of Commerce (MOFCOM). This pace of growth was the lowest since 2009, when the financial crisis hit retailers. “In the first half of this year, the growth in consumer spending may cool to a record low, and some retail companies may register losses,” said Kuang Zhenxing, Deputy President of the Beijing Modern Plaza shopping mall. “I know that the number of new stores was increasing in January, but the profits of individual retailers were rising at a slower pace,” Kuang said. A report from the research company Bain & Company showed that luxury goods retailers may suffer this year as a result of the economic downturn. Some luxury brands decided to slow the expansion of their businesses in China last year, and concentrated on maintaining high sales volumes in their existing stores, the report said. The growth of luxury sales in China is slowing, said Ouyang Kun, CEO of the World Luxury Association’s China office. Retailers in Hong Kong also have low expectations. “Sales of jewelry and expensive watches during the Lunar New Year were quite disappointing,” said Caroline Mak, Chairman of the Hong Kong Retail Management Association. In 2011, China’s total retail sales of consumer goods amounted to CNY18.12 trillion, a growth of 11.6% from a year earlier, according to the National Bureau of Statistics (NBS). Growth was 2.2 percentage points lower than the increase in 2010, the China Daily reports.

Chinese consumers spent about USD7.2 billion on luxury goods overseas during the week-long Spring Festival holiday, a 28.6% jump year-on-year, according to a survey by the World Luxury Association. Europe remained the top destination for luxury shopping during the holiday with a 46% market share. Chinese tourists accounted for 62% of its luxury sales, a rise of 12% year-on-year. The Association said Chinese consumers were the biggest luxury buying force during the holiday with watches, leather goods, fashion clothes and cosmetics topping their shopping lists. Luxury spending in China was only USD1.75 billion, mostly in Shanghai and Beijing. Up to 72% of survey participants said they were attracted by cheaper prices abroad. Import tariffs and consumption taxes can make luxury goods 72% more expensive in China than in France. However, 69% of survey participants said that what attracted them to buy was the wider range of products offered abroad while 45% said they enjoyed the better service.

McDonald’s plans to accelerate restaurant openings in China by adding up to 250 new outlets this year. The expansion program would mark a new high in the number of McDonald’s store openings in a year in China, which is behind Japan in terms of having the largest network of restaurants established by McDonald’s in the Asia-Pacific region. CEO James Skinner said the company opened a record 200 restaurants in China in 2011. This year, the total number of its stores in the domestic market would be raised to between 1,689 and 1,714. It had 1,464 stores in China at the end of last year, compared with 3,298 in Japan. While McDonald’s remains the world’s largest operator of hamburger fast-food restaurants, its expansion efforts in China pale in comparison to those of Yum! Brands. Kentucky-based Yum! is the leading fast-food restaurant chain in China, where it has about 4,200 stores in more than 700 cities. Its brands include KFC, Pizza Hut and hotpot chain Little Sheep. Market research publisher IbisWorld forecast that China’s fast food industry would generate sales of USD147 billion by 2016, up from an estimated USD74.8 billion last year. There were nearly two million establishments operating in the industry last year, including franchise and chain operators of all sizes and independent Chinese-style fast-food facilities, according to IbisWorld.

Shanghai retailers recorded average daily sales of around CNY812 million during the Spring Festival holiday, the best holiday shopping season since 1999. The statistics covered 4,000 stores belonging to 452 large and mid-sized retailers. They reported combined sales of CNY5.69 billion from January 22 to January 28, according to  the Shanghai Commission of Commerce. The total sales represent 14% growth from the Spring Festival period in 2011. Nationwide, retail sales for the Spring Festival holiday rose 16.2% year on year, the Ministry of Commerce said. More than 3.1 million tourists visited Shanghai during the holiday, up about 3% from the same period last year, generating CNY2.9 billion in revenue, the Shanghai Tourism Administration said.