Nov. 29 (Bloomberg) -- China, the world’s largest gold producer, may have record demand and output this year as jewelry consumption soars and miners expand production after prices reached all-time highs, according to the China Gold Association.

The country’s gold demand may be more than 450 metric tons this year, up from 395.6 tons in 2008, and output may climb to 310 tons, compared with 282 tons a year earlier, Zhang Yongtao, deputy secretary-general of the association, said at a conference in Kunming today. Annualized growth in China’s gold production was 9.5 percent in the past eight years, he said.

China overtook South Africa to become the world’s largest producer in 2007 and the World Gold Council said in July that the nation may pass India as the biggest consumer. Bullion touched a record of $1,195.13 an ounce Nov. 26 as a weaker dollar drove demand for precious metals as an alternative asset.

“The inflation concern this year has boosted the Chinese consumer demand for things like property, autos and gold,” Zhou Shijian, professor at Tsinghua University, said today from Kunming, capital of the southern Yunnan province.

Bullion, up 34 percent this year, is set for a ninth annual gain as central banks, pension funds and individual buyers seek to protect their assets from potential currency debasement and inflation. Gold may climb to $1,500 an ounce as the dollar falls amid low interest rates, Kenneth Tropin, chairman of Graham Capital Management, told Barron’s in its Nov. 30 issue.

‘Double-Digit’

Jewelry sales in China will climb at a “double-digit’’ pace this year as record household savings fuel demand for investment products and wedding gifts, Hong Kong Resources Holdings Ltd. Chairman Kennedy Wong said Oct. 23. Middle-class buyers in China, who have only just started to buy gold as an investment product, drove a 16 percent gain in gold and silver jewelry sales in the first nine months, said Wong, whose company has 219 jewelry stores in mainland China.