--- SEARCH ---
WEATHER
CHINA
INTERNATIONAL
BUSINESS
CULTURE
GOVERNMENT
SCI-TECH
ENVIRONMENT
LIFE
PEOPLE
TRAVEL
WEEKLY REVIEW
Learning Chinese
Learn to Cook Chinese Dishes
Exchange Rates


Hot Links
China Development Gateway
Chinese Embassies


Shanghai Opens Gold Exchange for Trading
China is expected to launch gold futures at its newly established Shanghai Gold Exchange when conditions are ripe, which opened Wednesday, said a top banking official.

The exchange, limited to spot transactions for the time being, will begin trading in gold futures contingent upon improvements in the current spot transactions, according to Dai Xianglong, governor of the People's Bank of China, the nation's central bank.

Dai said the futures trading will be part of the gold exchange's plan to become a financial marketplace with a focus on the gold investment business.

But Dai did not reveal a specific timetable, just saying: "The gold exchange will open for futures transactions when the time is ripe and when it is approved by the State Council.''

The official opening of the gold exchange Wednesday ended the 50-plus years of government monopoly over the gold market.

Since the founding of the People's Republic of China in 1949, Chinese gold producers had sold all of their products to the central bank, which had then allocated the precious metal to gold processors.

The central bank will stop purchasing gold from producers in China in the short term now that the Shanghai Gold Exchange, which has signed up 108 Chinese trading members thus far, has opened. Members include miners, jewellery makers, gold importers and exporters, and commercial banks, according to a statement released by the gold exchange.

These members are now permitted to conduct spot gold transactions, and they are exempt from a 17 per cent value added tax.

The bank governor was the first to strike the bronze gong at the Shanghai Gold Exchange, located in a European-style mansion on the Bund, now Shanghai's prestigious financial street.

In his speech, Dai said the opening of the exchange, on which silver and platinum can also be traded, also marks the establishment of all major financial product markets in China, following the opening of currency, securities, insurance and foreign exchange markets.

According to Shen Xiangrong, president of the gold exchange, the gold price on the exchange, which closed at 83.55 yuan (US$10.10) a gram Wednesday, will be the benchmark for the domestic gold market.

"The price on the gold exchange will basically fluctuate in line with changes on the world's gold markets, mainly London's,'' Shen said.

Traders on the gold exchange clinched 98 deals involving a total volume of 540 kilograms Wednesday.

The weekly quotation system for domestic gold prices, implemented by the central bank from June last year, was automatically cancelled after the launch of the gold exchange, said sources close to the bank.

Hailing the opening as a tangible step towards liberalization of the gold market in China, Albert Cheng, head of the World Gold Council's operation in eastern Asia, told China Daily: "We will see robust increases in gold demand because it will be much easier to buy gold on the exchange than from the central bank, and (we are likely to see a surge in) individual gold purchasing as an investment, which is now a blank in China.''

The Gold Council, a non-profit organization established by major gold miners in the world for the purpose of promoting the use of gold, has predicted that annual gold demand in China will grow to 600 tons in the next few years. The council's statistics put demand on the Chinese mainland at 213.2 tons last year.

(China Daily October 31, 2002)

Gold Exchange to Start in Shanghai Late October
Shanghai Becoming China's Gold Trading Center
New Rules to Strike Gold
Central Bank Plans for New Gold Exchange
Print This Page
|
Email This Page
About Us SiteMap Feedback
Copyright © China Internet Information Center. All Rights Reserved
E-mail: webmaster@china.org.cn Tel: 86-10-68326688