Gold market deregulation would mean a resumption of the precious metal's function as a common commodity and investment tool, Liu Shijin, director of the Industrial Economic Research Department of the State Council-affiliated Development Research Center, was cited by Saturday's Chinadaily as saying.

Chinese people are still forbidden to buy, sell and hold gold bars to save or for investment, according to the newspaper.

Deregulation would help gold producers and dealers analyze market trends, fine tune prices and reduce risks, Liu said.

Deregulation would also significantly stimulate demand for gold in China, experts said.

"Deregulation is expected to increase the demand from current levels of around 200 tons to 500 to 600 tons annually in a few years," Kerr Cruikshanks, corporate director of the World Gold Council (International Marketing), was quoted as saying.

Experts advocated the establishment of a national gold exchange as the first step towards gold market deregulation.

"A national gold exchange is expected to create a stable and credible market environment in the initial stages of deregulation," Liu was cited as saying.

The central government opened a domestic silver market about 10 months ago to pave the way for gold market deregulation.

(People's Daily 10/28/2000)